| | | | | Commentary | | The Straits Times index rose 0.51% or 14.71pts to 2885.76 (day range: 2887.58 - 2857.91) on Tuesday. The index is below its 20d MA (@ 2925) and above its 50d MA (@ 2864). 13% of the index constituents are above their 20D MA (vs 13% the previous session) and 50% of the shares are above their 50D MA (vs 47%). Trading volume on the index was low, 45.2% below the 3 months average. On a daily basis, the index has broken below its 20-day moving average, and is currently testing its 50-day moving average. Meanwhile the relative strength index has broken below its neutrality area at 50, calling for further decline as well. As long as 2940 holds as the key resistance, expect further decline toward 2855 at first. Hong Kong markets were closed on Monday and Tuesday. The HSI index was flat on Friday. The index is below its 20d MA (@ 22370) and below its 50d MA (@ 22650). 2% of the index constituents are above their 20D MA (vs 7% the previous session) and 7% of the shares are above their 50D MA (vs 14%). On the daily chart, the index is extending its down leg and has broken below its lower Bollinger band, which has allowed for a bearish acceleration. Meanwhile the 20-day moving average stays below the 50-day one, and the relative strength index has broken down its 30 level. As long as 22435 is not broken above, look for 21200 as the next target. |
| Straits Times Intraday: rebound. | | Pivot: 2872.00
Our preference: long positions above 2872.00 with targets at 2894.00 & 2903.00 in extension.
Alternative scenario: below 2872.00 look for further downside with 2865.00 & 2857.00 as targets.
Comment: the RSI shows upside momentum.
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| | | | | Opinion published is a ST (short-term) view. Green Lines Represent Resistance | Red Represents Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced | | Associated Warrants for Straits Times |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Put | 2850.00 | 28/04/2017 | -0.5 | CBWW | Macquarie Bank | STI MBL EPW170428% | Low risk | 2500.0 % | 8.1 % | | Put | 2750.00 | 28/02/2017 | -0.3 | BYNW | Macquarie Bank | STI MBL EPW170228% | High risk | 2500.0 % | 10.5 % | | Call | 3000.00 | 28/04/2017 | 0.3 | CBVW | Macquarie Bank | STI MBL ECW170428% | Medium risk | 2500.0 % | 7.4 % | | Call | 2950.00 | 28/02/2017 | BYMW | Macquarie Bank | STI MBL ECW170228% | High risk | 2500.0 % | 11.5 % |
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| Hang Seng Intraday: under pressure. | | Pivot: 21650
Our preference: short positions below 21650 with targets at 21500 & 21400 in extension.
Alternative scenario: above 21650 look for further upside with 21800 & 21900 as targets.
Comment: as long as 21650 is resistance, look for choppy price action with a bearish bias. Market was closed to celebrate Day after Christmas.
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| | | | | Opinion published is a ST (short-term) view. Green Lines Represent Resistance | Red Represents Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced | | Associated Warrants for Hang Seng |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Put | 21200.00 | 27/02/2017 | -0.4 | CBZW | Macquarie Bank | HSI MBL EPW170227% | High risk | 1000.0 % | 11.0 % | | Put | 2130.00 | 17/03/2017 | -0.3 | CAZW | Macquarie Bank | HSI MBL EPW170317% | High risk | 800.0 % | 12.7 % | | Put | 21400.00 | 26/01/2017 | -0.4 | CAQW | Macquarie Bank | HSI MBL EPW170126% | High risk | 1000.0 % | 14.5 % | | Call | 22600.00 | 27/02/2017 | CBYW | Macquarie Bank | HSI MBL ECW170227% | High risk | 1000.0 % | 17.9 % | | Call | 22400.00 | 30/03/2017 | 0.4 | CARW | UBS | HSI UBS ECW170330% | Medium risk | 1000.0 % | 14.0 % | | Call | 23000.00 | 30/03/2017 | 0.3 | CCEW | Macquarie Bank | HSI MBL ECW170330% | Medium risk | 1000.0 % | 12.7 % |
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| S&P 500 Intraday: further upside. | | Pivot: 2263.50
Our preference: long positions above 2263.50 with targets at 2274.00 & 2277.50 in extension.
Alternative scenario: below 2263.50 look for further downside with 2258.50 & 2255.00 as targets.
Comment: the RSI is mixed with a bullish bias.
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| | | | | Opinion published is a ST (short-term) view. Green Lines Represent Resistance | Red Represents Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced | | Associated Warrants for S&P 500 |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Call | 2280.00 | 17/03/2017 | 0.5 | CAXW | Macquarie Bank | S&P 500 MBL ECW170317% | Medium risk | 800.0 % | % | | Call | 2180.00 | 17/03/2017 | 0.65 | CAWW | Macquarie Bank | S&P 500 MBL ECW170317% | Medium risk | 800.0 % | % | | Put | 2130.00 | 17/03/2017 | -0.4 | CAZW | Macquarie Bank | S&P 500 MBL EPW170317% | High risk | 800.0 % | 16.9 % | | Put | 2030.00 | 17/03/2017 | -0.3 | CAYW | Macquarie Bank | S&P 500 MBL EPW170317% | High risk | 800.0 % | 19.8 % |
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| MA (50) & MA (20): The most simple trend indicators are Moving Averages. They simply correspond to an average calculated on an evolving time scale (20 and 50 periods): every day, the oldest value (often taken at the close) in the average calculus is replaced by the value of the new session.
Bollinger bands: are represented by 3 different bands and are derived from moving averages. The middle band corresponds to a simple moving average (MA (20)). The level of the upper band, in every point, corresponds to the sum of the level of the middle band and twice the value of the standard deviation associated to the 20-day moving average. Reciprocally, the level of the lower band corresponds to the level of the middle band diminished by twice the value of the standard deviation associated to the 20-day moving average. An envelop of the stock price is thus determined. This makes it possible to then identify the variation margin in which the stock should stay almost systematically. In the case of a stock following a Gauss law, 95 % of the trades will thus occur between these bands.
RSI (14): the Relative Strength Index aims at establishing a reference scale independently from the stock prices levels themselves. As the RSI has boundaries (0 and 100), it then becomes very easy to determine overbought (above 70) and oversold (below 30) areas. In addition, just as on prices themselves, supports and resistances can appear, especially when nearing the neutrality zone (near 50). Thus, the RSI is one of the most commonly used counter-trend indicators.
It is based on the average of rises and drops of price, with the formula:
RSI = 100 - [100 / (1 + RS)]
Where RS represents the average of up closes divided by the average of down closes on the considered period (14). | |
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