CapitaLand has strengthened, forming a white candle on Friday, March 5, accompanied by a notable increase in volume. This has been a trend since the last week of February, with white candle days attracting more buying. Quarterly momentum has rebounded off its equilibrium line. In addition, clear major positive divergences have formed between prices and annual momentum. As annual momentum recovers, it is likely to reinforce an upturn by quarterly momentum, which in turn should provide the impetus for a price break above resistance which coincides with the 50-day moving average at $3.25. In this event, the next resistance is at the 2021 high of $3.51. Support has been established at $3.12.
Although Singapore Airlines surged in the early part of Mar 1-5, it retreated to end the week of Mar 1-5 off its high. The chart pattern remains bullish. The price break above the six times tested resistance, which coincides with the top of a multi-month base formation indicates a target of $5.63, and this remains valid. Any retreat is likely to be temporary with initial support near $5.00 to $5.10.
Singapore Press Holdings continues to strengthen. This strength may abate a trifle in the week of Mar 8-12, but prices should be able to move progressively higher thereafter. SPH’s break above the top of a multi-month base at $1.25 indicated a target of $1.60. The subsequent move on Feb 23, clearing $1.25 decisively was accompanied by a surge in volume, and positive crosses between the 50- and 200-day moving averages. This move establishes support at the breakout level of $1.25. If up-momentum remains resilient, SPH could attempt to test the 2020 breakdown level of $2.
Right Timing was perhaps a bit too cautious on the technical outlook for the Straits Times Index. Positive indications on technical indicators are inevitably likely to be tempered by the volatility on Wall Street, with Nasdaq Composite and Nasdaq 100 particularly volatile. Add to this rising yields on the 10-year US Treasuries, and the US equity markets could take a nasty turn.
Despite the uncertainties in overseas markets, the STI closed the week of Mar 1-5 on a resilient note. The index broke down from 3,018 as Covid-19 turned into a pandemic and spread through the US in February and March 2020. These declines a year ago are likely to benefit annual momentum which has - mathematically at least - turned up and is rising. Two-year momentum has also turned up. These long term indicators are likely to keep the STI on an even keel. The next resistance is at 3,368 to 3,377, an area that was tested twice in 2019, but which the STI was not able to successfully challenge. Support is back at the rising 50-day moving average, currently at 2,925.
