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Thursday, 9 April 2009
Singapore Market by AmFraser
Confidence of big players evident from pre-holiday rally from higher STI support levels suggesting market could be in midst of best rebound since Oct 2007 peak STI high 1836.83/low 1797.40
Confidence of big players evident from pre-holiday rally from higher STI support levels suggesting market could be in midst of best rebound since Oct 2007 peak STI high 1836.83/low 1797.40
It is rarely that we find the market rebounding sharply on active volumes ahead of a holiday in a confirmed bearish environment.
Yesterday’s 1754 low which was just under our 1760-80 support guidance is testimony to the healthy underlying momentum with the STI now back to the 2 key historic resistances of 1826 and 1839 which were broken on Monday and being tested again this afternoon.
The index did not wait to test the next key historic support of 1730 or retrace 38% to 1710 and this is a major difference from the last Nov-early January rally when it quickly gave up most of the gains from 1474 to 1933 to as low as 1570. Even then the rebound resumed taking the STI to 1960 in early January.
With players toughened by the tricky market situation then this round should not make them easily lose confidence on seeing the STI losing 6% or 114 points from 1886 high last Friday.
In a recovering market even if it is short term – the last one lasted more than 2 months against one month so far this round - traders must not wait for lower support to be tested before coming in especially when the 2 resistance points in this case 1762 and 1730 are not far apart.
The STI rebounded from 1754 after touching its 13 day moving average yesterday, and this had taken place earlier at end-March when its low of 1663 coincided with this key short term buy indicator.
Another healthy sign of the durability of current rally is the flattening out of the 100-day MA (at 1698) with the index now well above it unlike during the last rebound in Nov-early Jan when the index was well below the still sharply falling MA.
It is also firmly above the 50-days at 1653 with the 2 appearing on track to make a bullish cut going forward.
Thus the latest run-up which comes almost one and a half years after the Oct 2007 peak is on firmer grounds and augurs well for a test of the 1900 psychological level and to the next historic resistance at 1976, 1993 and 2000-2038 area.
The upcoming earnings season may not stop the rally on its tracks even if poor results continue to be reported as nasty surprises should have lost their sting by now, unless major bearish US developments unfold in coming weeks.
Meanwhile, yesterday’s picks have mostly bounced off after touching or falling below 13-day MAs.
Capitaland ($2.65) fell to $2.42 just above our $2.36-39 support. It should move above nearest historic hurdle of $2.68-71 and test Monday’s $2.87 high, which is a whisker away from $2.88-97 resistance.
DBS ($8.88) in fact fell below 13-day MA to $8.35 yesterday and the swiftness in reaching Monday’s $9.24 high which is at low end of $9.22-48 historic resistance shows its ability to soar from two distant historic hurdles ie $8.42 and $9.22.
SGX ($5.91) did not fall to 13-day MA ($5.45- a historic support) but still managed to rebound from yesterday’s $5.58 low to as high as $5.95 today, short of Monday’s $6.20 peak. The next quarterly hurdle after $6.13 is the $6.30-50 area.
Keppel Corp ($5.48) fell below 13-day MA (at $5.35) hitting $5.10 yesterday very near $4.90-$5 support. It is retesting historic $5.50-55 resistance, having climbed to as high as $5.95 last Friday. Closest historic target after $5.50-55 is $6.60.
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Confidence of big players evident from pre-holiday rally from higher STI support levels suggesting market could be in midst of best rebound since Oct 2007 peak STI high 1836.83/low 1797.40
It is rarely that we find the market rebounding sharply on active volumes ahead of a holiday in a confirmed bearish environment.
Yesterday’s 1754 low which was just under our 1760-80 support guidance is testimony to the healthy underlying momentum with the STI now back to the 2 key historic resistances of 1826 and 1839 which were broken on Monday and being tested again this afternoon.
The index did not wait to test the next key historic support of 1730 or retrace 38% to 1710 and this is a major difference from the last Nov-early January rally when it quickly gave up most of the gains from 1474 to 1933 to as low as 1570. Even then the rebound resumed taking the STI to 1960 in early January.
With players toughened by the tricky market situation then this round should not make them easily lose confidence on seeing the STI losing 6% or 114 points from 1886 high last Friday.
In a recovering market even if it is short term – the last one lasted more than 2 months against one month so far this round - traders must not wait for lower support to be tested before coming in especially when the 2 resistance points in this case 1762 and 1730 are not far apart.
The STI rebounded from 1754 after touching its 13 day moving average yesterday, and this had taken place earlier at end-March when its low of 1663 coincided with this key short term buy indicator.
Another healthy sign of the durability of current rally is the flattening out of the 100-day MA (at 1698) with the index now well above it unlike during the last rebound in Nov-early Jan when the index was well below the still sharply falling MA.
It is also firmly above the 50-days at 1653 with the 2 appearing on track to make a bullish cut going forward.
Thus the latest run-up which comes almost one and a half years after the Oct 2007 peak is on firmer grounds and augurs well for a test of the 1900 psychological level and to the next historic resistance at 1976, 1993 and 2000-2038 area.
The upcoming earnings season may not stop the rally on its tracks even if poor results continue to be reported as nasty surprises should have lost their sting by now, unless major bearish US developments unfold in coming weeks.
Meanwhile, yesterday’s picks have mostly bounced off after touching or falling below 13-day MAs.
Capitaland ($2.65) fell to $2.42 just above our $2.36-39 support. It should move above nearest historic hurdle of $2.68-71 and test Monday’s $2.87 high, which is a whisker away from $2.88-97 resistance.
DBS ($8.88) in fact fell below 13-day MA to $8.35 yesterday and the swiftness in reaching Monday’s $9.24 high which is at low end of $9.22-48 historic resistance shows its ability to soar from two distant historic hurdles ie $8.42 and $9.22.
SGX ($5.91) did not fall to 13-day MA ($5.45- a historic support) but still managed to rebound from yesterday’s $5.58 low to as high as $5.95 today, short of Monday’s $6.20 peak. The next quarterly hurdle after $6.13 is the $6.30-50 area.
Keppel Corp ($5.48) fell below 13-day MA (at $5.35) hitting $5.10 yesterday very near $4.90-$5 support. It is retesting historic $5.50-55 resistance, having climbed to as high as $5.95 last Friday. Closest historic target after $5.50-55 is $6.60.
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