The impending IPO of Ant Financial may shift investor interest into Hong Kong, with Singapore Exchange being increasingly sidelined. Our own IPO scene may hot up with around five or so IPOs planning to list before the end of the year.

See also: Jack Ma's Ant Financial joins race for Singapore digital banking licence

It appears increasingly likely that a mega IPO like Ant may lead to the Straits Times Index remaining stuck within a narrow range. In the week of Oct 12–16, the STI moved sideways, gaining a mere point week-on-week to end at 2,533.

As indicators stand, short term stochastics may start peaking in the week of Oct 19–23. The 21-day RSI has eased slightly but its trend remains upwards.

The most encouraging indicator is quarterly momentum which stayed flat and is hanging on to its own moving average. ADX is also flat, and the DIs are neutral.

As a result, the STI is likely to also remain within a narrow range. Since the 50-day moving average is at 2,517, the index may attempt to hold at or near this level, with immediate resistance appearing at 2,574, at its 100-day moving average.

STI - THE EDGE SINGAPORE

STI - THE EDGE SINGAPORE

The US market has been a lot more lively than the SGX. The S&P500 Index, which closed at 3,483 on Oct 15, approached its all-time high of 3,588, attained just last month. It has now retreated. However, the relative strength of the SPX, which measures this broad market index against the Nasdaq Composite Index, and is represented by the green line in the chart has made a continuous series of positive divergences against the Nasdaq. A breakout has not materialised but when it does, it could imply that investors have rotated back to cyclicals. 

SPX - THE EDGE SINGAPORE