Singapore: STI Index (.STI) more downside risks in 2019 growth

Singapore: STI Index (.STI) more downside risks in 2019 growth

Singapore: STI Index (.STI) more downside risks in 2019 growth

SINGAPORE: The slump in Singapore’s non-oil domestic exports (NODX) may not be reversed anytime soon amid an unpredictable trade conflict between the United States and China, said economists.

Two watchers of the local economy have cut their full-year forecasts for NODX – the most-watched figure in Singapore’s trade report – deeper into negative territory, after official data on Monday (Jun 17) showed a double-digit decline for the third straight month.

The decline in NODX adds to recent weak data, including a contraction in the purchasing managers’ index (PMI) for the month of May, signaling further downward pressure for Singapore’s economy ahead, experts added.

BIGGEST SLUMP IN NODX SINCE MAR 2016

Figures released by Enterprise Singapore on Monday morning showed NODX down by 15.9 per cent in May on the back of decreases in both electronic and non-electronic exports.

While it was better than the 16.5 per cent decline expected by economists in a Reuters poll, May’s performance was a deterioration from the 10 per cent fall in April and an 11.8 per cent drop in March.

It also marked NODX’s worst showing since March 2016.

Apart from the high base effect from a year ago as noted by Enterprise Singapore, economists also highlighted other factors at play, such as the fading of the electronics cycle, easing global growth and lingering uncertainties from the US-China trade spat.

Given that, NODX has contracted 9.3 per cent year-to-date, said OCBC economist Howie Lee. Electronics was the chief culprit with a 20.3 per cent plunge, while non-electronics has dropped 5.6 per cent since the start of 2019.

With the US-China trade conflict shaping up into a tech war given the recent bans on Chinese technology giant Huawei, economists do not expect a respite for exports anytime soon.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 3,268.77.

The projected lower bound is: 3,143.08.

The projected closing price is: 3,205.92.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 2 black candles for a net of 5 white candles. During the past 50 bars, there have been 32 white candles and 17 black candles for a net of 15 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 85.2628. 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 51.28. 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 9 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 91. This is not a topping or bottoming area. The last signal was a sell 0 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 down -14.640 at 3,207.990. Volume was 17% below average (neutral) and Bollinger Bands were 22% narrower than normal.

Open High Low Close Volume___
3,210.2503,229.5503,202.2203,207.990 173,852,800

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

Moving Averages: 10-period 50-period 200-period
Close: 3,185.39 3,259.51 3,176.84
Volatility: 7 12 15
Volume: 179,603,904 207,980,320 212,328,400

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 1.0% above its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 25 periods.

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