SINGAPORE (Oct 20): Here are some charts this week for our technical analysis.
Straits Times Index (daily)
The Straits Times Index (3,340) gained a further 21 points during the week, taking the total gain to around 50 points in the past two weeks. This is near the year’s high of 3,354, a level that provides resistance. The 50- and 100-day moving averages are attempting to turn up. But, short term indicators are approaching the top end of their range. Short term stochastics has flattened at its top end, while 21-day RSI is at 64, a level from which it had previously encountered resistance. Quarterly momentum retreated. These indicators suggest that there could be near term consolidation.
In order to break above current levels, volume will probably need to expand significantly and this has not materialised yet. The 50- and 100-day moving averages are at 3,261, and retreats should be well supported here. The breakout level is at 3,350 to 3,354. A successful break above this level provides the impetus for a test of 3,500.
The main trend of annual momentum and 24-month momentum remains upwards.
Mixed outlook for small and mid-cap property stocks
Ho Bee Land ($2.51) breaks out of resistance
Prices broke out of $2.41 on Oct 13, indicating a measuring objective of $2.94. This indicates potential and may not necessarily be achieved in the near term. However, volume expanded on the breakout and has been healthy since then. Quarterly momentum turned up, and is rising.
ADX has turned up after five months of staying entrenched in a sideways range. The DIs are positively placed. Support for any retreat is at the breakout level of $2.41, and the immediate upswing may encounter temporary resistance at $2.56.
Chip Eng Seng (94.5 cents) extremely overstretched
This counter is extremely overbought. The 21-day RSI is at 88, its highest level. ADX is at 61. This indicator rarely goes beyond the 50 level for most stocks. In the past, it has risen to as high as 58 for this particular stock. Short term stochastics is at the top end of its range.
It’s difficult to see how prices can go much higher. While the trend has accelerated, it is also developing air pockets which can’t be good when prices turn down. Coincidentally, the high achieved in 2015 was 98 cents. Resistance often appears at important highs.
