Singapore: STI Index (.STI) could deliver attractive returns to investors

Singapore: STI Index (.STI) could deliver attractive returns to investors

Singapore: STI Index (.STI) could deliver attractive returns to investors

Singapore’s export-driven economy is among the most vulnerable in the ongoing U.S.-China trade conflict, but major investors said its stock market could deliver attractive returns this year.

“It’s very attractive and that’s one of the reasons why we’re actually overweight Singapore relative to other Asian equities,” Kelvin Tay, regional chief investment officer at UBS Global Wealth Management, said on Monday.

Tay told clients at the UBS Wealth Insights forum that the bank actually has a bearish outlook on the Singapore economy. The bank expects the country’s gross domestic product to grow by 2 percent in 2019, down from last year’s estimated 3.3 percent and at the lower end of official forecast of 1.5 percent to 3.5 percent.

Krishna Guha, equity analyst at Jefferies, wrote in a note last week that the three Singapore banks have the potential to continue growing their capital and that may result in higher dividend payouts. That’s one of the reasons that make the lenders an attractive investment option, Guha said.

“Notwithstanding uncertain macro conditions, Singapore banks, in our view, are sheltered by a combination of inexpensive valuation, growing payout and diverse levers to sustain earnings growth. Valuations are in the low range of historical bands and attractive regionally,” he wrote.

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 3,126.01.

The projected upper bound is: 3,300.48.

The projected lower bound is: 3,127.96.

The projected closing price is: 3,214.22.

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 22 black candles for a net of 5 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 81.6999. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 15 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 65.60. 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 52 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 118.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 7 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 6 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 38.840 at 3,212.300. Volume was 41% above average (neutral) and Bollinger Bands were 29% wider than normal.

Open High Low Close Volume___
3,191.3503,223.6103,190.7103,212.300 303,421,184

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

Moving Averages: 10-period 50-period 200-period
Close: 3,126.27 3,086.98 3,252.55
Volatility: 18 18 16
Volume: 217,775,136 199,087,600 233,150,416

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 1.2% below its 200-period moving average and is in an upward 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 bullish on .STI and have had this outlook for the last 4 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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