Technical Analysis
STI Index, Capitaland, City Development, Keppel Land, Ferrochina

STI Index, Weekly

The STI has acknowledged its 200 week moving average last week by testing and bouncing off it. The STI closed near its opening last week, forming a "doji" candle indicating that the market is undecided. In this "undecided mode", a close higher than last week's high might indicate a shorter-term upward move is due, whilst a close lower than last week's low would indicate a continuation of the downtrend. For this to happen, we want to see the market close higher than 2755 (last week's high) or lower than 2688 (last week's low) by this Friday.


Capitaland Weekly

Capitaland has recently tested and closed below its 200 week moving average and continued lower along with the STI. Momentum continues to carry it lower this week and the trend remains bearish. However, Capitaland is trading close to a support region from S$4.02 (July 2006 low) to S$4.00 (psychological round number). The stock price should see a slowdown or bounce around this region.

We maintain a short bias for Capitaland but advise clients to wait for the stock to test the S$4.02 to S$4.00 region before looking for selling opportunities. The next support level is at S$3.88 and subsequently, S$3.44 (October 2005 high).


City Development, Weekly

City Development has consistently found support around its July 2005 high at S$9.75. The first test was during March 2008 and second test was two weeks ago, during the week ending 19th August 2008. The important point to note here is that the reactions to the S$9.75 level have gotten smaller. The bounce off the second test is small compared to the rally off the first test, indicating dwindling buying to support the S$9.75 level. Price is now hovering around the S$9.75 region after testing it the second time.

Prices closing lower than S$9.75 in the daily timeframe would indicate that City Development has a high probability of trading lower. We advise clients to maintain a short bias for City Development while being mindful of the next support zone from S$8.80 to S$8.40 (July 2006 low) should they be selling.


Keppel Land, Weekly

Keppel Land has been in a long decent since the STI top in October 2007. It is now trading close to its July 2006 low of S$3.52. This level also coincides with the 2.618 Fibonacci projection from the October 2007 high at S$3.43. The confluence of these two levels should provide support from the S$3.52 to S$3.43 region. Although the trend is down, we caution clients to avoid selling until Keppel Land has bounced off this level.


Ferrochina, Daily

Last week we mentioned that Ferrochina had opened below its long-term support (April 2005) at S$0.94, providing a good selling opportunity. Price this week has not traded higher after a minor test of the 1.618 Fibonacci projection level at $0.875. The next support level is at the S$0.56 level, providing us with a good risk-reward opportunity.

We advise clients to sell around the S$0.885 level with a stop-loss at $1.02 and price target $0.56. This provides us with a good risk-reward, risking S$0.135 (S$1.02 – S$0.885) to gain S$0.38 (S$0.885 – S$0.56)

DISCLAIMER:
The information contained in this publication has been obtained from public sources which Phillip Securities Research has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the "Research") contained in this publication are based on such information and are expressions of belief only. Phillip Securities Research has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in this publication is subject to change, and Phillip Securities Research shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will Phillip Securities Research be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages.

Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this material are as of the date indicated and are subject to change at any time without prior notice.

This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this material may not be suitable for all investors and a person receiving or reading this material should seek advice from a financial adviser regarding the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products.

This publication should not be relied upon as authoritative without further being subject to the recipient's own independent verification and exercise of judgment. The fact that this publication has been made available constitutes neither a recommendation to enter into a particular transaction nor a representation that any product described in this material is suitable or appropriate for the recipient. Recipients should be aware that many of the products which may be described in this publication involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks.

Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in this research should take into account existing public information, including any registered prospectus in respect of such security.

©     2006 Phillip Securities Research Private Limited

More

Water, water (projects) everywhere
It would seem these days that not a week passes by without news of major staff layoffs around the world, especially among global financial institutions and US companies.

Stay defensive till recession is past its worst
With the Singapore economy expected to tip over into a technical recession according to the Citigroup's Singapore research team, investors are advised to stay...

Barclays: Asian growth fundamentals intact despite US woes
Asian stock markets may see a further correction of between 22% to 25% in the coming months with markets like South Korea, India and Indonesia being the most vulnerable...

Hotel: Downgrade due to tourism slowdown
DBS Research has downgraded the Singapore hospitality sector from 'positive' to 'neutral' following a 4% year-on-year decline in tourist arrivals numbers...

Six out of 10 fund managers sees onset of recession
Expectations of a global economic recession have risen sharply with risk aversion reaching a new high...

How the credit crisis came about
A mountain of debt with a foundation of shaky mortgages began to crumble in the summer of 2007. A little over a year later, Wall Street was in the grip of the biggest financial crisis since the Great Depression.

Cosco Corp
An elder once told me, a successful leader is not one who has a hoard of followers but rather one who raises up new leaders in his or her absence.

Yanlord Land
A number of years ago, anyone who went to China to do business must know the phrase, 'guan xi'.

Jardine C&C
It's among the top-traded stocks for the past few days. And for a company that Singaporeans know as the seller of Mercedes cars, Jardine C&C's business in Singapore is just the tip of the iceberg.

Shipping Trust Primer
A look at a relatively recession- and inflation-proof asset class that offers investors stable and good yields.

Property and REITs: Staying defensive in times of uncertainty
Recent developments in the local property market have sent mixed signals to investors. Several property developers have indicated the willingness to delay launches as...

Looking to make a bigger footprint
Jinjiang, on the southeastern coast of Fujian, has evolved over 20 years from a rural county into one of China's largest production base for sports and leather shoes.

Pitfalls in a Post-Bubble World
A year ago, there was barely an inkling of what was about to transpire in world financial markets and the global economy. There were some early warning signs that all was not well in the subprime slice of the US mortgage market.

Confronting the De-leveraging Spiral
The global economy has been on a bulimic credit splurge over the past two decades. Drastic steps are now needed before further convulsions set in.

Rebalancing your investment portfolio
IN THIS volatile market, investors have been understandably preoccupied with the day-to-day swings in stock prices. But instead of fixating on ticker movements...

Stock Pick
CapitaCommercial Trust: Buy (Kim Eng, 3 Oct), Singapore Petroleum Co: Hold (DBS Research, 3 Oct), Keppel Corp: Hold (DMG, 3 Oct), ComforDelgro: Buy (Merrill Lynch, 2 Oct), SMRT: Neutral (Merrill Lynch, 2 Oct)