Morning Highlights

Singapore Shares fell kicked off the week on a weak note, with investors worried about the US economy following the worst three-day plunge of 552 points on Dow Industrials since Feb 2009. The STI gapped down 61.28 points to open at 2789.70. Support is seen at 2791.57 (Friday’s low).

Quoted from the Chart Analysis by the Edge:

  • Long Term is up; Medium Term and Short Term is down

There are 2 possible scenarios for index…

1st case :
Index might face a steep pullback to around 2740 before trending sideways for a moment which might last for at least 1 month. We would like to see a double bottom formation. Currently, there is a fairly strong support at 2800. After consolidation, we will see index heading for 3000.

2nd case
Index might face a steep pullback and then a throwback will occur the next few days with extreme thin volume. After which, the index will resume back its downward movement and retrace further. There could be a possible change in trend. If that happens, the next critical support is at 2700.

Our Analysis: We feel that 1st case scenario is more likely to occur. Reference to early 2009, we have experienced before a steep pullback of 200 points and market traded sideway for at least 1 month. Hence, there is a very high possibility of a double bottom formation.

Do  look out for a double bottom. Meanwhile, our market sentiment is shifted to neutral. Any new positions should be traded with cautious and to exit quick. Currently, we are only focusing on IPOs that are listed recently, mainly Tiger Airway and Hiap Tong.

There are also a few strong stocks that are performing well like Epure which make a high of $1 before pulling back and Hong Leong Asia. We hope to see pull back of these 2 stocks before entering. Nonetheless, Epure might be over-extended, thus, do be cautious when entering since this share has been trending for quite a while and consolidation might be on the way.

News Updates

  1. General Electric earnings drop 19% to $2.94 billion in the 4Q
  2. McDonald’s profit & sales rise to cap off year of ‘broad-based strength’‏
  3. Dow industrials fall 200 points; American Express experienced its biggest decline, down 9%

Quick Picks: Here is a quick pick screen that we have designed to pick out potential stocks, both Bullish and Bearish. These are measured with emphasis on larger changes in price and volume. 

Bullish Stocks (Singapore)

Symbol

Name

Entry

SL

TSL

TP

Remarks
1 MIIF Macquarie International Infrastructure Fund Ltd 0.53 0.475 0.585

Stock Prices last updated at 9:00 (Singapore Time)

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