Singapore: STI Index (.STI) leading the losses in the region

Singapore: STI Index (.STI)  leading the losses in the region

Singapore: STI Index (.STI) leading the losses in the region

Southeast Asian stocks closed lower on Monday after US President Donald Trump threatened to hike tariffs on Chinese goods this week, rekindling trade tensions between Washington and Beijing, with Singapore leading the losses in the region. Trump sharply escalated tensions between the world’s two largest economies with tweeted comments on Sunday that trade talks with China were proceeding “too slowly”, and that he would raise tariffs on $200 billion of Chinese goods to 25 percent on Friday from 10 percent.

China, the biggest trading partner of Southeast Asia, was considering cancelling a round of US talks set for this week because of Trump’s comments, the Wall Street Journal reported. “Trump’s announcement regarding a possible increase in tariff on China will leave quite an impact … there might be a possible fallout in the trade deal,” AP Securities analyst Rachelle Cruz said.

“…We may see sustained profit-taking over the next few days (following Trump’s comments on tariffs), especially with most markets sitting on gains from the last few months,” said Liu Jinshu, director of research, NRA Capital. Equity markets, which had been largely expecting a trade accord, fell sharply across export-reliant Asia as further talks were thrown into doubt. The Singapore index, which is highly exposed to global trade, closed 3 percent weaker to its lowest level since April 2. The benchmark, which climbed 5.8 percent in April, was the biggest gainer in the region.

The United States and China are large export destinations for Singapore and an escalation in the conflict would mean severe headwinds for the city-state. Financials led broad-based declines with DBS Group, Southeast Asia’s largest lender, falling about 4 percent. Indonesia’s economy expanded more slowly than expected in the first quarter of this year, as investment dropped ahead of elections and campaign spending failed to sustain growth momentum.

Taking a cue from bleak GDP data, the Indonesian index closed 1 percent weaker at a four-month low. Philippine shares ended 1.3 percent lower, dented by declines in financials. Shares of International Container Terminal Services and Bank of the Philippine Islands were among the worst performers on the index.

There is some uncertainty in the Philippine markets in the run-up to the general elections on May 13, AP Securities analyst Rachelle Cruz said. Thai markets were closed on Monday on account of a national holiday marking the coronation of the Thai monarch King Maha Vajiralongkorn.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 3,299.39.

The projected upper bound is: 3,382.38.

The projected lower bound is: 3,249.73.

The projected closing price is: 3,316.05.

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 31 white candles and 19 black candles for a net of 12 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 33.0260. This is not an overbought or oversold reading. The last signal was a sell 2 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 47.63. 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 sell 1 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 -135.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 2 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 1 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 24.530 at 3,315.150. Volume was 27% below average (neutral) and Bollinger Bands were 21% narrower than normal.

Open High Low Close Volume___
3,299.9603,322.8203,292.3803,315.150 150,384,704

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

Moving Averages: 10-period 50-period 200-period
Close: 3,362.17 3,277.17 3,187.94
Volatility: 21 13 15
Volume: 214,178,528 212,253,664 215,786,112

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 4.0% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 22 periods.

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