Right timing: Goldilocks market enters home of the three bears

Right timing: Goldilocks market enters home of the three bears

Goola Warden
09/02/18, 09:54 pm

SINGAPORE (Feb 9): Here are some charts for our technical analysis this week:

Straits Times Index (3,377, daily)
The Goldilocks period of a perfect rising trend appears to be over, and the uptrend of the Straits Times Index has been broken.

As to how far down the STI can go, the 200-day moving average -- remarkably still intact -- is at 3,328, and is as good a guide as any. Unfortunately, any rebound off this level is unlikely to prevent a breakdown below the moving average. Quarterly momentum is in steep retreat, and has just broken below its equilibrium line.

The chart pattern shows the STI breaking below a broadening formation, a typical chart pattern at the top of bull markets. The breakdown level is at 3,400, with the breakdown indicating a target of 3,100. Volume expanded as prices fell, confirming a change in trend.

This will not be a one-way move. The market is likely to decline progressively, in a series of peaks and trough, with each peak lower than the previous peak, and each trough lower than the previous trough.

The immediate resistance is at 3,400. The 21-day RSI is at 38 and has room to fall.
STI Weekly chart shows annual momentum turning down
Annual momentum has broken down after a series of negative divergences suggesting that an all round weaker phase lies ahead, and could persist for months.


Living it up

SINGAPORE (Mar 25): This is the season for indices. On March 20, Singapore was ranked 34th in the World Happiness Index — less happy than Taiwan, but far more cheery than Hong Kong and China, as well as its neighbours, Thailand, Malaysia and Indonesia. Globally, the Scandinavian and north European cities top the index; and New Zealand, Canada and Austria round out the top 10. The index this year focuses on happiness and the community, taking into account how happiness has evolved over the years, as affected by technology, social norms, conflicts and government policies. A week earlier, th....

The charismatic bankrupt who allegedly pulled the strings behind Singapore's largest stock manipulation scandal

SINGAPORE (Mar 26): Garbed in purple overalls, John Soh Chee Wen cuts a relaxed figure as he takes his seat. The garment falls fittingly on his athletic frame, not unlike a designer suit. It could well have made a fashion statement, save for the word "prisoner" emblazoned in white across the back. As his legal team huddled around him before the start of the trial, the 60-year-old is a picture of calm. At one point, he casually flashes a thumbs up at his lead counsel, N Sreenivasan, a managing director and senior counsel at Straits Law LLP. Then, as he turns back to his seat in the dock, ....

OCBC still bullish on banking stocks after a lacklustre FY18

SINGAPORE (Mar 26): OCBC Investment Research remains bullish on Singapore’s banking space while keeping its sector “overweight” with “buy” calls on both DBS and UOB, which have been given fair value estimates of $29.31 and $28.30, respectively. Both stocks had dividend yields of 4.8%, with DBS and UOB trading at the respective book values of 1.3 times and 1.1 times, or at an average of 1.2 times historical book as at the close of Wednesday. In a Tuesday report, OCBC analyst Carmen Lee notes that raising this average to 1.3 times book and factoring a 10% premium for DBS over the....