SPH

Analysts are looking at the potential dividend payout to support the shares. Citi Investment Research expects a 9.9% dividend yield for FY2009, Kim Eng expects a prospective 7.5% dividend yield in FY 2009. DBS and OCBC are forecasting dividend yields of 8% and 7.1% respectively. For more information please refer to The Edge Investment Weekly.

The technical picture for SPH is not looking good. It broke the $3.00 support level on 13 Jan 09 and closed at $2.73 on Friday.

The Fibonacci objective point indicates a target price of $2.72 so the stock may stage a rebound from this level.

However, looking at the MACD charts and ADX charts, any rebound will be simply be a technical rebound and traders who are still holding on to their long positions will try to liquidate their holdings to limit their losses.

Capitaland

Capitaland had a roller coaster ride this week with the stock going to as high as $3.68 before hitting a low of $2.89 on Friday. The stock managed to close above its low on Friday to end at $2.91.

The stock is now sitting on the 61.8% Fibonacci Retracement level as well as the support level. With the Dow closing near its low of the day on Friday, this support level will be difficult to hold come Monday.

The test will be to see if the break is a false breakdown. If that is the case, the stock should quickly reclaim the $2.90 level. However looking at the big sell down volume, the bears should have the upper hand. The next support line is at $2.66.

In the latest issue of The Edge Magazine, it was mentioned that there were rumors that Capitaland may announce a right issue and the ratio would be at one-for-four, at $2.50 per share. If the rumor turned out to be true, the possibility of the stock retracing all the way to 5 Dec 08 low of $2.43 is very high.

STI Update

DOW opened 2009 with a bang, going up 258 points to close above 9000 points for the first time since 5 Nov 08.

Singapore market also got off to a good start on Friday with the index closing above 1800 points.

The technical indicators are bullish at this point but do not seem to point to a sustainable rally.

The MACD indicator is still above its signal line which is a bullish sign. But one concern is that the indicator made a bullish crossover at the end of Oct 08 and may pullback anytime soon.

ADX indicator is still at the low end indicating that any rally will not be sustainable. The good thing for the bulls is that +DI is now above –DI. So there should be a short term rally.

RSI is also not at overbought level and there is still room for the market to go up.

Hence for the short term the market should be positive but mid and long term the market is still not in good shape unless we see further evidence on the technical charts.

Happy trading!

City Development

City development is testing the upper boundary of its down trend channel.

MACD just made a bullish crossover and it indicating further strength.

ADX is decreasing which is a good sign. This means that the down trend that we have seen in the past few months is decreasing in strength. However the +DI is till below –DI suggesting that the current rally is most likely to be a bear market rally. The +DI will need to get above the –DI for a confirmation of bullish market.

Short term resistance is at $6.34 and $6.97 levels. All bets are off if the price drops below $5.15.

Keppel Corp

The stock market volatility continued to haunt market traders. Dow surged from 7509 to end at 8046 in the last hour of trading. News that newly elected US president is getting Timothy Geithner as treasury secretary gave traders a reason to buy up battered stocks.

The show of strength should spur Singapore’s market come Monday. Keppel Corp, once a market darling, has come a long way down since October 07 high of $15. The stock closed at $4.60 on Friday.


The stock price managed to hold on to the 61.8% re-tracement level of the recent up moved that saw the stock moved from $3.35 to $5.62 in 6 trading days.

If the stock is able to move above $5.62, the Fibonacci objective is at $6.57. If it breaks below $4.19, it is likely to retrace all the gains made and re-test the low of $3.35.

Dow Support Level

Dow closed at 8424 on Tuesday, up 151 points. The index tested 7947 level, the low established on 13 Nov 08. It managed to rebound and claw back above the 8000 level. Buyers came in only in the last hour of trading.


The index looks to be forming a double bottom and has managed to find buyers whenever it hit below 8000. Next resistance level is at 8835 and support level is at 8085.

Sembcorp Marine

Sembcorp Marine is having a good run recently. Recovering from a low of $1.15 set on 28 Oct 08, this stock has rebounded to a high of $1.98 yesterday. That is an impressive move of 72% percent in the span of 5 trading days.

The price has hit the pivot point made on 10 Oct 08 which is serving as resistance level. The stock has also retraced more than 50% of the down move from $2.73 to $1.15. The next resistance level is at $2.14 which is the 61.8% retracement level.

Let’s see if it can break through the downtrend line. If it is not able to make a break through, the stock may fall back to $1.66 level.