Singapore: STI Index (.STI) investors growing increasingly optimistic over concrete progress on the US-China trade front

Singapore: STI Index (.STI) investors growing increasingly optimistic over concrete progress on the US-China trade front

Taking cues from Monday’s record close on Wall Street, Asian markets were mostly higher on Tuesday, with investors growing increasingly optimistic over concrete progress on the US-China trade front as well as diminishing fears of a no-deal Brexit.

Returning from the long weekend, Singapore’s Straits Times Index (STI) opened 1 per cent higher but investors took to booking profits after last week’s strong performance, with the benchmark ending at 3,197.04, an 11.51-point or 0.4 per cent gain.

“US-China trade conflict remains a critical near-term narrative for the equity market and with Washington and Beijing coalescing around Phase one of the trade deal, the market has started pricing in bullish expectations around Phase two which is thought to include a complete withdrawal of the proposed December US tariffs,” AxiTrader Asia-Pacific market strategist Stephen Innes said.

Traders were also encouraged by US corporate earnings which remain supportive of a risk-on environment as well as optimism that an October rate cut by the US Federal Reserve is a certainty.

In Singapore, trading volume stood at 1.09 billion securities, 91 per cent of the daily average in the first nine months of 2019. Meanwhile, total turnover clocked in at S$1.46 billion, 35 per cent over the January-to-September daily average.

Technical Indicators

Overall, the bias in prices is: Upwards.

The projected upper bound is: 3,256.53.

The projected lower bound is: 3,139.99.

The projected closing price is: 3,198.26.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 21 white candles and 28 black candles for a net of 7 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 6 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 83.9484. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 63.44. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 42 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 150.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 11.510 at 3,197.040. Volume was 24% above average (neutral) and Bollinger Bands were 25% narrower than normal.

Open     High      Low     Close     Volume___
3,211.2303,227.1503,187.2903,197.040 264,131,104
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 3,155.61 3,132.63 3,224.67
Volatility: 9 12 12
Volume: 186,848,592 203,198,384 211,887,952

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

STRAITS TIMES gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
STRAITS TIMES is currently 0.9% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .STI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .STI and have had this outlook for the last 1 periods.

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