Whether it is the new REIT IPO, or the potential listings of at least three special acquisition companies (SPACs), or the minor tussle - albeit temporary - for Singapore Press Holdings, or even speculative plays on potential RTO targets, some interest has returned to the local market. Against this backdrop, the Straits Times Index has remained steady, down just nine points week-on-week during Nov 8-12. This is despite volatility in the US where the indices touched new highs before falling sharply.
See: Investors head to STI as HSI is buffeted by turbulence
The STI’s break above resistance at 3,200 appears to be good. The index confirmed this break in the week of Nov 1-5. The break above 3,200 indicates an upside of 3,345. As of Nov 12, indicators remain supportive with quarterly momentum staying in positive territory. The DIs remain positively placed but ADX has eased somewhat.
The STI’s moving averages remain positively placed, and are likely to act as uptrend lines for the time being. The 50-day moving average is currently at 3,136, and the 100-day moving average is at 3,135. Support appears at the breakout level at 3,200.
China’s bond market turbulence has not abated, but China Evergrande Group met a US$ bond payment during the week of Nov 8-12. This calmed otherwise volatile market sentiment somewhat.
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See also: STI’s upside from breakout remains valid as risk-free rates fade, but stay watchful for FOMC
As a result, the Hang Seng Index ended the week of Nov 8-12 up 457 points at 25,327 and above its 50-day moving average at 25,231. This could turn out to be another whipsaw. ADX is down to 13, a level that indicates a lack of trend. Quarterly momentum remains below its equilibrium line. Initial support stays at the 50-day moving average, failing which the twice tested 23,900 level provides support. Resistance appears at 26,100.
