Straits Times Index
The STI has been falling since 22 May and from the high of 3464.79 to the low formed on 21 June 3065.42. Basically, the STI has lost over 400 points within a month.
The question now is where will be a good level to long stocks that are highly correlated to the STI or even trading the STI itself?
Based on the Fibonacci figures, there is a strong confluence of levels of the longer-term 50% Fibonacci retracement level and the short-term 61.8% Fibonacci retracement level. That gives us the level of near 3000. In addition, the 61.8% Fibonacci projections (purple lines) also give a figure of 3005. Lastly, the 3000 level is a psychological round number figure, which increases the probability of this level.
Despite the strong recovery of STI on Friday, I am seeing more downside for STI next week or even the next few weeks. It will be good that a significant reversal candlestick appears at the confluence of 3000, then we should really consider taking the trade to the long side.
Generally, the trend for STI is still bullish but with the lower highs formed it gives a short-term bearish pattern. And for the long-term trend to stay bullish, it will be best that STI do not break the 2930 level.
To conclude, generally the blue chips counters such as the three bank counters are most likely to reverse along with the STI, therefore we should be more focused on the STI to get clues to when should we start entering for longs.
Sembcorp Marine
SembMar looks pretty interesting in its chart formation. A symmetrical or descending triangle in the making with the level of around 4.08 holds the critical key to whether SembMar will collapse or keeping it afloat to go higher.
SembMar movements is critical in making or breaking the STI in the near future.
Keppel Corp
KepCorp also looks pretty critical in the making or breaking of STI. It has been trying to stay above the rising trend line (brown line) to prevent it from falling more substantially which could translate into further downside in the STI.
In my opinion, I think the trendline is not likely to hold it based on my views of the STI of having more downside. And if this holds true, KepCorp is most likely to come down to the round number of 10.00 or even 9.60 where a greater confluence of levels can be seen.
NOL
Among the shipping counters Yangzijiang, Cosco and NOL, I think NOL is relative more stable.
NOL has been consolidating near the bottom and has been keeping its head above the critical level of 1.00. Although there is a descending triangle seems to be forming but the triangle is formed near the bottom, the probability is lower. If the descending triangle really comes into play, the potential target could be 0.50 for NOL and that would also mean the global economy is very gloomy.
Genting
Genting SP in my opinion does not look very good and pretty dangerous, especially when the double top looks like it is in play.
I would advise people with longs in this counter to cut small unless you already have a
CLEAR plan of what you from this counter.
The potential target of Genting, based on the double top pattern, it will be 1.12, which is a new low for Genting as well.
Be careful in this counter guys.
Capitaland
Capitaland has been falling quite furiously and have started falling way before STI.
The significant lower highs and lower lows are clear bearish signals. In addition, it broke the rising trendline support on Friday with exceptional high volume. Capitaland could be supported in the near future with the strong confluence of levels between 2.90 - 3.05 which also around the 50% Fibonacci retracement level.
However, in my own opinion, Capitaland could have more room for further downside especially when there is such strong selling pressure for this counter.
The 3 local banks - DBS, UOB, OCBC
The three banks have much in common. With the 3 of them forming a similar pattern as the STI. And the rebound in the STI on Friday was likely due to these 3 banks which both the UOB and OCBC hit the 200-day SMA and recovered, except for DBS it still have more some distance away from the 200-day SMA.
For DBS, should it turn lower, it has potential to hit at least the 14.80 to 15.00 level where the confluence of the 61.8% Fibonacci projection and the 200-day SMA. However, if the bears are very strong, DBS will likely to find itself near the 14.30 level where the 100% Fibonacci projection will hit the long-term rising trend line.
For UOB, it is at a strong support level of around 19.50 and was able to close above this level on Friday. Should UOB turn higher, it has to clear the level of around 20.50 in order to go much higher. Going lower, the next confluence of levels of around 18.35 seems pretty strong along with the 100% Fibonacci projection target.
For OCBC, looks like it is being supported at the 38.2% Fibonacci retracement level and the 200-day SMA along with a previous pivot point. However, if the global markets turn lower, it is likely to break this support region and bringing itself to around 9.30 to 9.38 range where the previous pivot resistances are and also the 50.0% Fibonacci retracement level.
The 3 banks are critical counters to watch to determine the direction of the STI. Having said that, it seems critical for the banks to hold their intermediate supports to prevent further selling.
In my opinion, I believe that STI has more room to the downside and that will also mean that banks have more downside too. So be cautious in trading the bank counters despite almost all of them are near a good support region.
Due to the lack of time and space, I will not be able to analyze every single counter in the SGX. I do not mind accepting any chart request for any counters, even counters in the NYSE, NASDAQ or S&P500.
Do note that all analysis are my personal views and opinions. If you would like to trade, please consult your authorized brokers and use all available analysis at your own discretion.
Good luck in the upcoming week in your trading. :)
