Technical View
STI, CapitaCommercial Trust, See Hup Seng

Straits Times Index: Breakout move is forthcoming

Elliot Wave count for the Straits Times Index (FSSTI Index) remains unclear. Nevertheless, the tightening of the bollinger bands suggests that the STI is currently undergoing a consolidation phase. This also signifies that a breakout move either way is imminent although recent price action is more skewed towards the possibility of a downside break.

The descending triangle pattern that has appeared is a bearish phenomenon. This formation that has manifested within the STI indicates that a break of its baseline at the 3,010 mark would result in a downside move of at least 100 points. We believe that should this event occur, the ensuing downtrend could drag the STI all the way to our unchanged support level at the 2,860 mark. All our other support and resistance levels are also unchanged from our previous report.

CapitaCommercial Trust: Expect further upside

Price action of CapitaCommercial Trust (CCT SP) looks bullish as depicted by the potential centreline crossover above the zero mark on the MACD chart after it had produced a bullish moving average crossover in late Jan. We identify the first resistance mark at the $2.19 level as represented by the upper bollinger band and the highs seen on 25 Jan & 01 Feb. More resistance would be found at the $2.44 barrier if the hurdle at $2.19 is taken out.

The lower bollinger band and the low on 12 Feb at the $1.93 mark should serve as the support level and prevent any additional downside.


See Hup Seng: Trend has reversed

Bearishness is expected for the share price of See Hup Seng (SHS SP). Price action had failed to produce a series of higher highs and higher lows after the violation of the upper bollinger band which suggests that the recent bullishness has tapered out. The price target [0.455 + (0.455 - 0.38)] that was derived from the double bottom formation after the break above $0.455 has also been met, further evidence that there is no more impetus for the share price to advance from a technical point of view for the short term.

Its former price target at $0.53 and the high on 20 Feb is seen as the resistance level that would keep price action in check should there be a rally. Otherwise, the previous resistance mark at $0.455 as represented by the peak of the double bottom would serve as the first support barrier. If this level fails to hold, expect additional support at the $0.38 mark as derived from the trough of the double bottom.


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.

More

Towards a brighter tomorrow
At a time when a lot of companies are expected to weigh in with weaker sales and profit numbers amid the current global financial turmoil and downturn, JK Yaming expects to chalk up record figures for the full financial year.

Insulated US tech companies hit by slump
The US technology industry, which resisted the economy's growing weakness over the last year as customers kept buying laptops and iPhones, has finally succumbed to the slowdown.

BlackRock Global Views: 4th Quarter
Amid all of the current turmoil, our best advice is for investors to focus on broad diversification among asset classes. In these circumstances, we recommend that investors remain cautious...

Commodities to outperform stocks, says Superfund
Most commodities are likely to rebound and outperform stocks both in the short-term and over the next 3-5 years, according to managed futures fund provider, Superfund.

Deflation Fears Lurks as Global Demand Drops
As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy – the prospect that goods will pile up waiting for buyers and prices...

Global investors see equities as undervalued
Investors are waiting for the right conditions to return to equity markets amid the most pessimistic outlook yet recorded, according to Merrill Lynch's latest survey of fund managers.

Buy American. I Am by Warren Buffett
I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds.

Sarasin finds silver lining in financial storm
Investors are advised to take a fresh look at global markets and seek opportunities despite the financial crisis over the past four weeks...

Threadneedle offers funds with short-sell capabilities
The UK-based Threadneedle group will soon be offering investors in Singapore mutual funds with short-sell capabilities known as 130/30 funds.

Investors eye the Fear Index
Fear is running high on Wall Street. Just look at the Fear Index. With all those stomach-churning free falls and sharp reversals in the stock market recently...

Q&A with Lead fund manager at Midas Capital International
Given the bearish market conditions, what would be your advice for investors in their approach towards their asset allocation strategies?

Q&A with Saxo Capital Markets, Asia Pacific Strategist
Given the bearish market conditions, what would be your advice for investors in their approach towards their asset allocation strategies?

Stock Pick
Man Wah Holdings: Neutral (Phillip Securities, 18 Nov), Swiber Holdings: Neutral (DMG, 18 Nov), Armstrong Industrial: Buy (DMG, 18 Nov), Olam: Buy (DMG, 17 Nov), Sembcorp Marine: Buy (DMG, 17 Nov)