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Keppel readies for a break, caution on OUE surge, respite for STI

The Edge Singapore
The Edge Singapore 4/9/2021 09:20 PM GMT+08  • 3 min read
Keppel readies for a break, caution on OUE surge, respite for STI
OUE has surged and looks set to move higher but caution should be exercised. Keppel Corp is challenging a downtrend and resistance
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Technically, OUE is certainly attracting its fair share of attention. The moving averages are bunched up and turning positive simultaneously. Quarterly momentum is shooting higher. Volume is rising. Technical indicators can be said to be in place to support further gains. But, for investors with Riady REITs, the experience has been painful. So trade with caution.

Elsewhere, Keppel Corp looks like a safer trade. Prices have been entrenched within a narrow range for the past five sessions. Since the low of $4.10 last year, and the breakout of the initial base at $4.50 in November 2020, prices have also stayed within a broader range. While the stock has risen by more than $1.30 from its low, further upside looks very likely. First though, prices need to break above resistance at $5.50 or so. Quarterly momentum appears poised for an upturn at its equilibrium line. In the meantime, the 50- and 100-day moving averages are jostling for a positive cross. If these materialise as volume, currently absent, expands, a further breakout could materialise. In this event, the upside could be at $7. Support is at $5.45.

Sembcorp Marine has paused but this is likely to be temporary. On Friday, April 9, prices closed at 20 cents, a support level. Its upside of 27 cents, following the break above the base at 15.5 cents to 15.7 cents remains valid. Among its short term indicators, only 21-day RSI has turned down from an overbought reading of 81. The retreat is likely to be temporary.

Mandarin Oriental International has been consolidating and should be ready for a price advance. Prices moved above the confluence of a resistance and the 50-day moving average at US$1.77 on Apr 5, indicating an upside of US$2.07. The move was accompanied by a breakout by quarterly momentum above its equilibrium line, and a modest expansion in volume. Any retreat should meet with support at the breakout level of US$1.77.

See also: Straits Times Index heads for calmer waters as fear gauge eases

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Blue-chip property stocks may take a breather. City Developments is retreating, but should find support at the $8 to $8.08 range, despite appearing weak initially. Singapore Press Holdings’ moves are part of an upward progression. The chart pattern could turn out to be a bull flag, where prices retreat for around three days before turning up again. Support should be raised to $1.70, the start of a minor gap which could turn out to be a continuation gap. The next resistance appears at $2.

SEE:OUE Commercial REIT to upsize senior secured facilities to $978 mil

The Straits Times Index looks somewhat tired following its rise from 2,881 in Feb to 3,207 in the first week of April, before easing slightly to end at 3,184 on April 9. Both quarterly momentum and short term stochastics are likely to move sideways in the next three to four trading days. If they turn down, which is likely, the STI would have difficulty making much headway in the week of Apr 12-16. The immediate range is likely to be narrow, with the index entrenched between 3,150 to 3,220. The pause is likely to be temporary, with the uptrend resuming in a week or two. The original break above the narrow 3,071 to 3,118 range in the week of Mar 15-19 remains valid as does the upside of 3,368 to 3,377.

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