Singapore: STI Index (.STI) busy week ahead as central banks make monetary policy decisions

Singapore: STI Index (.STI) busy week ahead as central banks make monetary policy decisions

Singapore: STI Index (.STI) busy week ahead as central banks make monetary policy decisions

It is going to be a busy week ahead as central banks make monetary policy decisions and more economic data is released.

Markets’ performance last week was affected somewhat by Brexit developments and the outcomes from China’s National People’s Congress.

But the less talked-about drivers, such as the ongoing US-China trade dispute, should continue to have a bearing on investment decisions this week.

Singapore’s market, especially the tech stocks, may get their cues from Wall Street.

Last Friday, Wall Street – especially its tech players – took to updates that Washington and Beijing were making progress on trade talks positively. This came despite US data showing that manufacturing output had fallen for a second straight month in February.

The Dow Jones Industrial Average rose 0.54 per cent to 25,848.87, the S&P 500 gained 0.50 per cent to 2,822.48, and the Nasdaq Composite added 0.76 per cent to 7,688.53. The S&P 500 posted its best weekly gain since the end of November, and Nasdaq had its best weekly gain so far this year.

In its weekly outlook, the UOB global economics and markets research team said: “The case for a ‘patient’ approach before the next FOMC policy move has been clearly spelt out and the focus of the March FOMC will likely be the Fed’s balance sheet reduction programme.”

Elsewhere in Asia, a slew of economic data is due, mostly from midweek on. Japan will release February trade data numbers today. On Wednesday, data for South Korea’s February producer price index and Malaysia’s February consumer price index (CPI) will be released. And Japan will release its February CPI data on Friday.

The week will also see four central banks in Asia – Thailand, the Philippines, Taiwan and Indonesia – making monetary policy decisions.

While most of the central banks are likely to keep policy rates unchanged, UOB said the Philippine central bank, with a new governor in charge, “will be more closely watched as it may announce a 25 basis points rate cut to its overnight borrowing rate to 4.5 per cent”.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,276.37.

The projected lower bound is: 3,157.56.

The projected closing price is: 3,216.96.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 27 white candles and 23 black candles for a net of 4 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is 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 44.9780. This is not an overbought or oversold reading. The last signal was a buy 10 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 49.29. 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 94 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 -26. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 13 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 12.780 at 3,212.960. Volume was 27% below average (neutral) and Bollinger Bands were 24% narrower than normal.

Open High Low Close Volume___
3,210.4903,216.3103,206.4503,212.960 149,113,632

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

Moving Averages: 10-period 50-period 200-period
Close: 3,209.26 3,208.83 3,188.52
Volatility: 9 12 15
Volume: 206,065,904 212,104,496 223,497,152

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 0.8% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of .STI (mildly bearish). Our trend forecasting oscillators are currently bearish on .STI and have had this outlook for the last 11 periods.

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