Singapore: STI Index (.STI) Asian markets ease after May’s Brexit vote defeat

Singapore: STI Index (.STI) Asian markets ease after May’s Brexit vote defeat

Singapore: STI Index (.STI) Asian markets ease after May’s Brexit vote defeat

Asia markets took a break on Wednesday, as investors assessed and looked for direction after the British Parliament overwhelmingly rejected its Prime Minister (PM) Theresa May’s Brexit deal. Markets also tuckered out from the earlier growth stimulus announcement from China.

Britain’s Members of Parliament voted a 432 to 202 vote to reject Mrs May’s deal on Tuesday, and British newspapers called the outcome ‘a complete humiliation’, ‘no deal, no hope, no clue, no confidence’ and Mrs May ‘the humiliated PM’.

By late afternoon in Singapore, Singapore’s Straits Times Index edged up 0.28% or 9.09 points, at 3,221.39, while FTSE Bursa Malaysia Kuala Lumpur Composite Index eased lower by 0.48% or 8.09 points, at 1,671.33.

Chinese indices also saw muted trading with the Hang Seng Index closing higher by 0.27% or 71.81 points, at 26,902.10, while the Shanghai Composite Index ended the day’s session flat or 0.08 points higher, at 2,570.42. The smaller Shenzhen Composite was little changed, down by 0.12%.

Tokyo’s Nikkei 225 index dipped 0.55% or 112.54 points, to close the mid-week trading at 20,442.75 points, while the broader Topix Index was lower by 0.32% or 4.95 points, at 1,537.77 points.

Brexit vote defeat sheds optimism on Britain not exiting the bloc on a bad deal

The Sterling had rallied to more than a two-month high on Monday night to hit US$1.2912 before United Kingdom’s (UK) Brexit vote was cast. It last traded at US$1.2885, at around 4.00pm, Singapore time.

‘An overwhelming defeat for the UK parliament vote on the Brexit draft deal had been within expectations, yielding little changes for the market,’ IG market analyst Pan Jingyi commented.

‘It still looks as if “no deal” is the least-likely option, and on this basis, markets are happy to take a more optimistic view, although anything could still happen,’ cautioned IG market analyst Chris Beauchamp.

‘But if the UK is going to exit it all, it now looks to be on the softest possible terms, something that will please investors and may even make UK assets a lot more attractive … there is a lot of uncertainty to be removed first, and even a delay to Brexit until later in the year does not change this,’ Mr Beauchamp added.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 3,132.44.

The projected upper bound is: 3,315.32.

The projected lower bound is: 3,149.64.

The projected closing price is: 3,232.48.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.

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 82.3140. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 16 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 67.23. 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 53 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 114.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 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 7 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 16.810 at 3,229.110. Volume was 3% above average (neutral) and Bollinger Bands were 42% wider than normal.

Open High Low Close Volume___
3,220.2303,230.7703,211.5603,229.110 221,727,696

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 3,145.29 3,090.35 3,251.67
Volatility: 15 17 16
Volume: 223,046,944 200,063,360 233,163,984

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 is currently 0.7% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 5 periods.

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