Rotational interest will continue among the lower liners as they take turns to advance and inevitably retreat. A number of penny stocks are taking advantage of positive market sentiment to raise equity.
Separately, the Straits Times Index managed to move above the psychological 5,000 level to test a high of 5,021 on April 15. On Feb 23, the STI made an all-time high of 5,041. As a result of the several times the STI tested and managed to move above 5,000, the breakout level is likely to be at 5,022. The 21-day RSI and quarterly momentum are moving in different directions, and not quite synchronised. Quarterly momentum is falling, and 21-day RSI appears to be turning up from neutral levels. ADX is at 18, but has turned up from 16. At this level, it is still suggesting a sideways trend. The DIs are positively placed.
In sum, the STI may continue to trend sideways but with an upward bias. The breakout needs to be well defined and clear and this has not materialised yet. Immediate support is at the flat 50-day moving average, currently at 4,938. When the breakout materialises, it is likely to indicate an upside of several hundred points from the STI's current level, perhaps even towards JP Morgan’s earlier target (of 6,000).
The Brent crude spot chart is interesting. The price is at US$90 per barrel. The movement is volatile. But negative divergences have developed between price and 21-day RSI; and quarterly momentum is falling. The ADX line is also falling although it remains relatively high at 34. ADX needs to get into the teens for the price of Brent crude to move sideways. At any rate, support has been established at US$90 based on the chart. It may not break down on the first test. Instead prices could rebound. But, technicallly, the largest gains appear to be over. And, a breakdown below US$90 could see prices back to US$70.
See also: Rotational interest continues to lift penny stocks and these are attracting buying demand
Economic data benign, outlook uncertain
Singapore’s non-oil domestic exports (NODX) expanded 15.3% y-o-y in March, accelerating from 4.0% y-o-y in February. CGS Intl says the growth “exceeded both our and Bloomberg consensus expectations.” This was driven by electronics exports. In contrast, non-electronics exports edged down 0.6% y-o-y in March.
“Despite the escalation of the US-Iran conflict, Singapore’s NODX momentum remained resilient, supported by continued strength in electronics demand. East Asia remained the largest contributor in March driven by robust semiconductor shipments.
See also: Watch stocks attract interest, Oiltek is overbought, STI’s consolidation continues
“We expect electronics export momentum to remain supported by sustained global demand for AI, particularly in data centres, servers, and memory products. However, we see rising downside risks from the evolving geopolitical environment. A prolonged increase in crude oil prices could raise production and transportation costs, while weaker global demand and tighter financial conditions may gradually weigh on external trade volumes. Over time, heightened uncertainty may also slow capital expenditure and export-related investments, leading to softer growth in the trade cycle” CGS cautions.
UOB Economics and Market Research says: “There are limited signs of impact from the Middle East conflict so far, as developments since 28 Feb have yet to show up in March trade data. We think April and more likely May NODX/IP data will provide a more accurate assessment of the extent of the impact from the Middle East conflict. We reiterate our recently downgraded full‐year 2026 GDP growth forecast for Singapore at 2.5% (from 3.6% previously; 2027 forecast: 2.7%).”
