The Hour Glass’ share price surged on May 21 accompanied by a simultaneous surge in volume. As a result, at the closing of $1.08 on May 21, prices are at a 20 year high, and above the Mar 31, 2021 net asset value of 97 cents. Because of the price surge, technically, prices look like they have broken out of a sideways range. Despite an indicated upside, prices could turnaround and fall swiftly, as it must be said that this counter is relatively illiquid. In addition, because of the volume surge, the company is likely to elicit a query from the regulator.
At the other end of the spectrum, investors are concerned about Singapore Airlines as both traders and investors are cautious about the impact of more mandatory convertible bonds.
SEE:The Hour Glass reports 8% growth in earnings for FY21, declares DPS of 4 cents
SIA’s share price, which peaked at $5.70 in April, fell to a low of $4.50 on May 18, establishing this level as a secondary support. The stock is attempting to rebound following a double bottom and an upturn by short term stochastics. The rebound is likely to encounter resistance at the flat 100-day moving average at $4.86. Although the short term range is narrow and biased to the upside, prices could ease towards more substantial support the $4.08 to $4.18 range further out. Quarterly momentum has eased but would probably encounter support at its equilibrium line. Hence sentiment is likely to be driven by corporate action which has yet to be reflected in the share price as volume continues to shrink.
After losing 145 points week-on-week during May 10-15, the Straits Times Index managed to bounce off an intra-day low of 3,027, and off its 100-day moving average, both on May 17. The 100-day moving average at 3,040 and a support area at 3,050 was sufficient to provide the STI with enough cushion to withstand the fall.
With stochastics at the low end of its range, and 21-day RSI and quarterly momentum both wanting to rebound, the downside for the index is likely to be limited. On the other hand, with ADX at an ebb, and the DIs still negatively placed, the rebound is likely to be capped at 3,150, a level that was once a support.
There has been little change in the STI’s chart pattern since May 15. It shows that the STI broke below a thrice tested support at 3,150 and its 50-day moving average at 3,140. The chart pattern also indicates that prices formed a minor top, and the downside from the break which took place on May 12 is 3,040, a level which was whipsawed on May 17.
With the downside limited, and the upside capped, investors and traders alike may have to gird themselves for a boring rest of this month. A sustained recovery by the index is unlikely, and it may only materialise during the northern hemisphere’s summer months, when there is, sometimes, a traditional summer rally.
