Leaving the narrow range of the Straits Times Index aside, Catalist-listed Yinda Infocomm experienced a sudden surge that elicited a query from regulators. In two trading sessions, prices rose from 20 cents to a high of 39.5 cents. The stock was trading at 35.5 cents on May 27. Technically, such surges are rarely part of sustained moves, especially by small caps — unless one considers the likes of the three penny stocks which crashed in 2013 and the related ISR Capital which has been renamed.
Although quarterly momentum has been a lot higher in a previous rally, short-term indicators are at the top end of their ranges. Stochastics, 21-day RSI and ADX are at their all-time highs, indicating an extreme overbought situation. The only advice is to trade with caution.
Following two sessions of sharp surges, a couple of the technical indicators of The Hour Glass are at the very top end of their range. Quarterly momentum is at an all-time high and the 21-day RSI is at the top end of its range. Elsewhere, ADX is rising, but it has been a lot higher in the past. The share price started a surge on May 21 accompanied by a simultaneous surge in volume. At its closing price of $1.18 on May 25, The Hour Glass is at a 20-year high and now well above its March 31 NAV of 97 cents. The break above the long sideways range at 95.5 cents had indicated an upside that has been met. This counter is relatively illiquid and prices could turn around and fall swiftly.
Singapore Airlines peaked at $5.70 in April and fell to an intra-day low of $4.41 on May 17, establishing this level as a secondary support. Short-term stochastics are rising after the formation of a double-bottom at the low end of its range. Prices, too, attempted to form a minor bottom, breaking out of a resistance at $4.86, which is also the level of the flat 100-day moving average. Quarterly momentum is neutral and has found support at its equilibrium line. Although sentiment is likely to be driven by corporate action which is not necessarily positive, the break above the 100-day moving average is encouraging. On the other hand, ADX is falling, an indication that an uptrend is unlikely. If anything, the current rebound faces a ceiling at $5.24, which is the confluence of a resistance and the 50-day moving average which has turned down.
The STI is attempting to move above 3,150. This level was a support which was breached on May 12. The breakdown indicated a downside of 3,040 which has been attained. The index fell below this level on May 17 before rebounding swiftly. This move, coupled with the 100-day moving average level, which is currently at 3,060, establishes 3,040 as a meaningful support. More immediately, stochastics has turned up from the low end of its range and the 21- day RSI has rebounded from 37, which is near the low end of its range. These short-term indicators are aiding the STI’s rebound. Since ADX continues to decline, an uptrend may not develop just yet. Instead, the index is likely to encounter resistance at 3,220. Individual stocks may outperform.
For instance, DBS Group Holdings is now at $30. A break above this level will shatter a psychological barrier. Singapore Press Holdings, which is not an index stock anymore, has stabilised and is likely to build a consolidation range between $1.50 and $1.80. The stock has just covered the gap between $1.61 and $1.78 when it made an intra-day high of $1.81 on May 21. Nasdaq-listed Sea will make its maiden appearance on MSCI Singapore on May 28. Although loss-making, Sea’s market capitalisation is greater than DBS’s. DBS, it must be noted, made a net profit of $2 billion in 1QFY2021 ended March. So in terms of share price, the largest local bank has some catching up to do.
