Singapore: STI Index (.STI) Banks lead gains here

Singapore: STI Index (.STI) Banks lead gains here

Singapore: STI Index (.STI) Banks lead gains here

There was much cheer for traders yesterday due to a confluence of factors supporting risk appetite ahead of today’s European Central Bank rate decision.

The Straits Times Index (STI) advanced from the opening bell, eventually settling at 3,204.52, gaining 48.81 points or 1.55 per cent.

It was much the same in the Asia-Pacific as Australia, Hong Kong, Japan, Malaysia and South Korea posted gains. China bucked the trend, closing 12.39 points, or 0.4 per cent, lower at 3,008.81.

Markets in Asia started the day digesting news that United States President Donald Trump had fired his National Security Adviser John Bolton over a number of “strong disagreements”.

“John Bolton was an uber-hawk who advocated hardline approaches to North Korea, Russia and Iran, among others. The last is particularly significant as his departure could potentially thaw relations with Iran,” Oanda Asia-Pacific senior market analyst Jeffrey Halley said.

On the US-China trade front, investors in search of further reasons to believe the frosty relationship between the two is thawing did not have to look far.

In the afternoon, China announced it had approved tariff exemptions on products from the US ahead of talks next month in Washington, although crucially it did not list corn, soya beans or pork.

China also moved to encourage foreign investment in its financial markets, with global funds no longer needing approvals to purchase Chinese equities and bonds.

The effects of rising bond yields continued to be in play, with more investors making a run for equities.

On a more sombre note, South Korea filed a complaint to the World Trade Organisation against Japan amid ongoing tensions.

In Singapore, trading volume clocked in at 1.45 billion securities, 21 per cent over the daily average in the first eight months of this year. Total turnover came to $1.41 billion, 31 per cent more than the January-August daily average.

Gainers trumped decliners 238 to 157. The blue-chip index had just four of 30 counters in the red.

The local banks continued to do the heavy lifting. DBS Group Holdings advanced 1.2 per cent to $25.25, while OCBC Bank added 1.4 per cent to $11. United Overseas Bank outdid them, finishing up 2.3 per cent at $26.37.

Offshore and marine sector picks also gained, and CMC Markets analyst Margaret Yang noted rising crude oil prices, with “the new appointment of Saudi Arabia’s energy minister inspiring hope for further production cuts”.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,264.18.

The projected lower bound is: 3,138.16.

The projected closing price is: 3,201.17.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 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 86.5722. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 1 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 59.83. 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 8 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 151.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 8 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 48.810 at 3,204.520. Volume was 24% above average (neutral) and Bollinger Bands were 33% narrower than normal.

Open     High      Low     Close     Volume___
3,172.2803,204.5203,165.7403,204.520 271,889,408
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 3,129.06 3,235.10 3,216.41
Volatility: 12 13 14
Volume: 213,886,752 224,164,272 212,662,864

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 0.4% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on .STI and have had this outlook for the last 29 periods.

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