Technical View
STI, Synear Food, Wilmar
Straits Times Index: Make or break at the 2,745 level
| Significance |
Price |
Details |
| 2nd Resistance |
2,950 |
30-day MA / Trend high on 07 Jul |
| 1st Resistance |
2,887 – 2,895 |
14-day MA / Daily highs on 17 & 18 Jul |
| Current level |
2,847.73 |
Closing price of FSSTI on 18 Jul 08 |
| Support level |
2,745 |
Yearly lows on 22 Jan & 17 Mar |
The market defied our expectations that the 2,862 support level would hold as the Straits Times Index (FSSTI Index) hit
a low of 2,819 and lost 79 points during the previous week. As we view the decline from 3,269 in May 08 as a Wave 2,
we were previously of the opinion that the STI would end its descent at the 2,862 mark as Elliot Wave guidelines
suggest that Waves 2 usually do not retrace more than 80% of Waves 1. Furthermore, the presence of a previously
unfilled technical gap around that area had also reinforced our belief that the 2,862 level should have been a legitimate
support mark.
Nevertheless, the fact that the current Wave 2 has yet to retrace the whole of Wave 1 at 2,745 indicates that our Wave
count may not be incorrect as of yet. However, we also realise that since the current Wave pattern has ventured out of
its usual trading benchmark, it has become increasingly difficult to pick a bottom. In the event that our support level at
the 2,745 mark is broken, we would be revising our Wave count, thereby nulling our bullish view that we have held on
for the past few months.
Meanwhile, should the STI start to trend upwards, initial resistance is identified at the 2,887 – 2,895 range, courtesy of
the 14-day moving average and a series of daily highs. Further resistance is seen at the 2,950 level, as depicted by the
30-day moving average and the trend high on 7 Jul.
Synear Food: Any potential upside to be capped
| Significance |
Price |
Details |
| Resistance level |
0.48 – 0.49 |
50-day MA / Daily highs on 15 – 17 Jul 08
|
| Current level |
0.435 |
Closing price of SYNF on 18 Jul 08 |
| Support level |
0.40 |
Lower Bollinger Band / Trend low on 04 Jul |
Recent price action of Synear Food (SYNF SP) has failed to produce a clear break above the upper bollinger band and
has been on a downtrend since. Additionally, share price has also broken below the 50-day moving average and the
61.8% fibonacci retracement of 0.40 to 0.515 at 0.445 as the selling momentum persists – we believe that further
downside would be forthcoming.
Our price target and support level is at the 0.40 mark where the lower bollinger band and the trend low on 4 Jul resides.
Resistance, meanwhile, should be strong at the 0.48 – 0.49 area (as derived from the 50-day moving average and the
daily highs on 15 & 17 Jul) and cap any potential upside.
Wilmar: Oversold but looking bearish
| Significance |
Price |
Details |
| Resistance level |
4.67 – 4.69 |
Convergence of 100 & 150-day MAs |
| Current level |
4.10 |
Closing price of WIL on 18 Jul 08 |
| 1st Support |
3.93 – 3.95 |
76.4% fibo retracement from 3.38 to 5.71 / Trend low on 27 Mar |
| 2nd Support |
3.38 |
Trend low on 18 Mar |
In a previous report, we wrote that Wilmar (WIL SP) was poised for more downside should the baseline of its
descending triangle at 4.90 give way. True to form, this previous support level was recently broken through and share
price has touched a 3-mth low at 4.02 last week.
The various technical indicators are still picturing a bearish bias. Although Wilmar currently looks oversold as measured
by the bollinger bands and the RSI, note that price action had produced four consecutive lower highs and lower lows
while penetrating below the lower band and that no positive divergences relative to the RSI have appeared. Also, the
MACD is still trending downwards while the ADX has turned up, both indications of which the selling momentum is still
prevalent.
Nevertheless, should share price stage a technical rebound, strong resistance at the 4.67 – 4.69 area by virtue of the
100 & 150-day moving averages would be available to cap further advances. On the other hand, should price action
continue with its decline and break below its 1st support area at the 3.93 – 3.95 area, further support at the 3.38 level
would be the next price target.
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. |
Up to-date current Financial News for Investors
