STI is safe for now

Dubai’s announcement to restructure its biggest corporate debtor, Dubai World, and delay payment on some of the company’s US$59 billion of liabilities caused tremors across global stock market.

Singapore market was closed for holiday on Friday and did not bear the brunt of the global selling. Its impact will be felt on Monday on market open for business.


The technical charts are still showing a positive picture.





There is a high chance that the MACD indicator will move below its signal line in the coming week which will change the technical picture.


A look at the KST weekly indicator for STI showed a bearish crossover on 12 Oct 09.

If the index moves below 2600 then it will be very bearish. The last time the KST weekly indicator made a bearish crossover was on 28 July 2008. And the index dropped from a high of 2912 to 1473 before it made a bullish crossover again. Let’s see if the market is able to fend off a bear attack.

Market Correction Or Trend Reversal?

Dow Jones Industrial Average closed at 9712 on Friday down 249 points. The moved erased all the gains made on Thursday. The index closed below the uptrend channel and is at dangerous territory. The RSI is now at 45 level. Note that RSI has not fall below 40 level since Jul 09. MACD is showing bearish signal as well with the indicator below its signal line. -DI is set to cross the +DI, this may mark the beginning of the correction that the market has been expecting for some time now.

The next few trading days will be crucial. If the index is able to close within the
uptrend channel, it will be good for the bulls. If the index is not able to gather enough
momentum, then the correction looks set to test the low of 9378 set on 2 Oct 09.

SC Global

SC Global has come a long way since hitting a low of $0.295 on Mar 09. Prices tested $1.42 on 5 Oct 09 before rebounding to close at $1.63 on Friday 9 Oct 09.

SC Global is in the luxurious property sector. Sale of Seven Palms Sentosa Cove got underway and it managed to sell 6 out of 10 released units in a recent private preview. Transacted price range from $3,100-$3,400 psf with each unit costing $11m.

The technical charts are also showing improvements following the test of $1.42 on 5 Oct. Prices is on the rise and is set to test $1.77 level. MACD indicator is about to make a bullish crossover. However volume for the recent rebound has been on low volume which shows that market players are still not coming back in full force.

Last Friday, this counter makes a Doji pattern. If the price can break the $1.77 level on high volume, we could see $2.00 soon.