Consolidation lows on Oct 04 / 161.8% move of Wave 1 of C
2nd Support
1,792 – 1,824
Consolidation lows on Aug 04 / Lower Bollinger Band
Wave Count
Start date
End Date
Start Value
End Value
Wave 1 of C
05 May 08
16 Jul 08
3,269
2,819
Wave 2 of C
16 Jul 08
24 Jul 08
2,819
2,997
Wave 3 of C
24 Jul 08
18 Sep 08
2,997
2,307
Wave 4 of C
18 Sep 08
22 Sep 08
2,307
2,604
Wave 5 of C
22 Sep 08
17 Oct 08
2,604
1,877
Our target price of 1,876 for the Straits Times Index (FSSTI Index) was almost on the dot as the index hit a new low of
1,877 during the previous week. From a technical perspective, we believe that the STI may still fall further as implied by
these three indicators – the bollinger bands that continue to widen and not showing any signs of contraction; the 14-day
ADX hovering around the 40 mark, a signal that the current trend remains strong and; the 14-day RSI that is only
slightly oversold despite the present meltdown.
With the STI presently trading at 1,878, the first level of support at the 1,872 – 1,876 area that is just around the corner
will be crucial. Should this barrier be broken, this would mean that the current downtrend could extend beyond the
161.8% move of Wave 1 of C. While we have identified the next area of support at the 1,792 – 1,824 range, we are not
ruling out any further declines should this level be broken.
On the other hand, any technical rebound experienced by the STI may not last. Should the 1st resistance at the 1,991 –
2,037 area be taken out, additional resistance at the 2,218 – 2,230 range should serve to cap any further upside.
Wilmar Int'l: No short-term relief in sight
Significance
Price
Details
Resistance level
2.75 – 2.79
Peak of Double Bottom
Current level
2.06
Closing price of WIL on 17 Oct 08
Support level
1.76 – 1.77
Trough of Double Bottom / Lower Bollinger Band
Chart action of Wilmar (WIL SP) looks to be in the initial stages of carving out the second half of a Double Bottom
pattern. This indicates that additional downside could be forthcoming – coupled with the 14-day RSI still trading above
the 30 mark, this implies that share price is not oversold and may even drop further. Also, we note that price action of
late has tended to trade in line with the lower bollinger band – while a technical rebound always occurred after shooting
past the lower band, this ensuing bounce had consistently been met with more selling.
Support is seen at the 1.76 – 1.77 range, courtesy of the trough of the Double Bottom formation and the lower bollinger
band. After touching this level, price action should then appreciate to the resistance area at 2.75 – 2.79 to complete the
formation. A clear break below the support level, however, would signify that the potential Double Bottom be no longer
at play.
DMG & Partners Research Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
----------------------------------------------------------------------------------------------------------------------------------------------- Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
----------------------------------------------------------------------------------------------------------------------------------------------- Neutral: Share price may fall within the range of +/- 10% over the next 12 months
----------------------------------------------------------------------------------------------------------------------------------------------- Take Profit: Target price has been attained. Look to accumulate at lower levels
----------------------------------------------------------------------------------------------------------------------------------------------- Sell: Share price may fall by more than 10% over the next 12 months
----------------------------------------------------------------------------------------------------------------------------------------------- Not Rated: Stock is not within regular research coverage
This research is for general distribution. It does not have any regard to the specific investment objectives, financial situation and particular needs of
any specific recipient of this research report. You should independently evaluate particular investments and consult an independent financial adviser
before making any investments or entering into any transaction in relation to any securities or investment instruments mentioned in this report.
The information contained herein has been obtained from sources we believed to be reliable but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed in this report are subject to
change without notice.
This report does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities, DMGAPS and its affiliates, their directors, connected person and employees may from time to time have interest and/or underwriting commitment in the securities mentioned in this
report.
DMG & Partners Securities Pte Ltd is a participant in the SGX-MAS Research Incentive Scheme and receives a compensation of S$5,000 per stock per annum covered under the Scheme.
DMG & Partners Securities Pte Ltd is a joint venture between OSK Securities Berhad (a subsidiary of OSK Investment Bank Berhad) and Deutsche Asia Pacific Holdings Pte Ltd (a subsidiary of Deutsche Bank Group). DMG & Partners Securities Pte Ltd is a Member of the Singapore Exchange Securities Trading Limited.
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