| | | | | Commentary | | Singapore | | The Straits Times index dropped 1.26% or 41.96pts to 3284.78 (day range: 3296.08 - 3273.57) on Friday. The index is below its 20d MA (@ 3293) and below its 50d MA (@ 3314). 70% of the index constituents are above their 20D MA (vs 70% the previous session) and 63% of the shares are above their 50D MA (vs 63%). Technically, the index opened with a bearish gap and traded below the 20-day moving average. Moreover, the relative strength index dipped below the neutrality of 50. However, it still managed to locate above the key support at 3225. Unless this key support level is given way, short-term bullishness persists, and the index should revisit 33500 on the upside before targeting 3430. However, a break below 3225 would call for a further decline toward 3175.
The HSI index fell 0.84% or 240.68pts to 28366.62 (day range: 28665.9 - 28296.99) on Friday. The index is above its 20d MA (@ 28347) and below its 50d MA (@ 29096). 62% of the index constituents are above their 20D MA (vs 54% the previous session) and 38% of the shares are above their 50D MA (vs 30%). Technically, the index retreated and has returned to levels around the descending 20-day moving average. The relative strength index still stays below the neutrality of 50, showing a lack of upward momentum for the index. As long as the level of 29100 holds as the key resistance on the upside, the short-term outlook remains bearish, and the index is expected to pull back to 27580 (around its recent low) and 26850 on the downside. Alternatively, breaking above 29100 would open a path toward 29900 on the upside. |
| Straits Times ST: consolidation. | | Pivot: 3225.00
Our preference: long positions above 3225.00 with targets at 3350.00 & 3430.00 in extension.
Alternative scenario: below 3225.00 look for further downside with 3175.00 & 3110.00 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
| | In order to leverage this directional view we have selected the following warrant: | | Strike | 3300.00 | | Expiry | 31/12/2018 | | Delta | 0.5 | | Ticker | SYDW | | Issuer | Macquarie Bank | | Name | STI MBL ECW181231 | | Conv ratio | 2500.0 | | Eff. Gearing | 7.6 | | Warrant Strategy | |
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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 |
| Hang Seng ST: under pressure. | | Pivot: 29100
Our preference: short positions below 29100 with targets at 27580 & 26850 in extension.
Alternative scenario: above 29100 look for further upside with 29900 & 30500 as targets.
Comment: the index currently faces a challenging resistance area at 29100.
| | In order to leverage this directional view we have selected the following warrant: | | Strike | 29000.00 | | Expiry | 30/08/2018 | | Delta | -0.5 | | Ticker | CTIW | | Issuer | Macquarie Bank | | Name | HSI MBL EPW180830 | | Conv ratio | 1000.0 | | Eff. Gearing | 13.3 | | Warrant Strategy | |
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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 |
| 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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The information contained in this Newsletter is obtained from sources believed to be reliable and accurate as at the date of publication. However, TRADING CENTRAL has not verified the materials, which may not be complete or accurate. Opinions, estimates and other information contained herein may be changed or withdrawn without notice. Any prices and quotes published in this Newsletter are purely indicative and for information purposes only. Indicative prices and quotes shown in this Newsletter may vary significantly from indicative prices or quotes available from other sources.
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