Singapore: STI Index (.STI) shares off to strong start for the year

Singapore: STI Index (.STI) shares off to strong start for the year

Singapore: STI Index (.STI) shares off to strong start for the year

Investors were filled with new year optimism yesterday, giving 2020 a surprisingly buoyant start.

Singapore’s Straits Times Index (STI) shot up by as much as 1 per cent at one stage before ending the session at 3,252, up 29.17 points or 0.9 per cent.

Elsewhere in the Asia-Pacific, Australia, China, Hong Kong, Malaysia and Taiwan were higher, with the Hang Seng Index the best performer with a 1.3 per cent gain.

South Korea bucked the trend while Japan remained closed, resuming trading today.

Recent developments have given investors much to cheer about.

United States President Donald Trump has set Jan 15 as the date when Beijing and Washington will sign a “phase one” trade deal, the Chinese central bank has lowered its cash reserve ratio for banks in a bid to stimulate growth and inject liquidity, and the private survey of China’s manufacturing sector remained healthy.

Moreover, the region’s other manufacturing data releases implied a degree of confidence was returning, Oanda’s Asia-Pacific senior market analyst Jeffrey Halley said.

Locally, advance fourth-quarter growth forecasts were mostly in line with street expectations.

Trading volume here clocked in at 1.8 billion shares worth just $883.15 million, with gainers thumping losers 326 to 141. Only one of the benchmark’s 30 counters ended in the red – transport operator ComfortDelGro, which edged down 0.4 per cent to $2.37.

Yangzijiang Shipbuilding was the STI’s most active, rising 3.6 per cent to $1.16 with 25.3 million shares changing hands.

Property developers were among the better performers on the day. CapitaLand added 1.1 per cent to $3.79, City Developments jumped 2.1 per cent to $11.18 and UOL Group gained 2.3 per cent to $8.51.

DBS Group Research analysts said yesterday that these developers are projected to deliver strong return on equity for the year on the back of recent mergers and acquisitions and continued asset recycling.

Among pennies, Mermaid Maritime jumped 4.4 per cent to 14.1 cents on 45.3 million shares traded. The provider of engineering services to energy firms said on Tuesday that its associates secured contract extensions worth US$199 million (S$268 million) for two of its jack-up drilling rigs.

The Trendlines Group leapt 27.1 per cent to 12.2 cents before the start-up incubator requested a trading halt in the afternoon pending an announcement.

Shares were trading at an 18-month high at the time of the halt.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 3,207.62.

The projected upper bound is: 3,300.23.

The projected lower bound is: 3,207.10.

The projected closing price is: 3,253.66.

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 4 white candles and 4 black candles. During the past 50 bars, there have been 24 white candles and 23 black candles for a net of 1 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 71.7468. This is not an overbought or oversold reading. The last signal was a sell 3 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 65.88. 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 39 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 217.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 3 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 14 period(s) ago.

Rex Takasugi – TD Profile

STRAITS TIMES closed up 29.170 at 3,252.000. Volume was 41% below average (neutral) and Bollinger Bands were 39% narrower than normal.

Open     High      Low     Close     Volume___
3,230.4803,256.0903,220.6703,252.000 136,381,904
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 3,223.94 3,216.25 3,224.60
Volatility: 5 9 12
Volume: 107,321,488 252,795,376 223,406,256

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 upward 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 bullish on .STI and have had this outlook for the last 4 periods.

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