Singapore market

Singapore market- The Singapore bourse has been relatively resilient as
the
index rose past 2500. Small cap stocks have also lost some of their
upward
momentum though most of the top tier china related stocks are still in
focus. We view support for the ST Index at 2470-2467 and then 2450. So
long
as the index manges to hold above the first support zone at 2470-2475,
we
are unlikely to see any significant sell-off. There is interim
resistance
for the ST index near 2520, which is the zone of a prior gap in January
2000.
There are however several signs of bearish divergences. Market volume
and
value for the month of March has been significant;y lower compared to
previous peak levels in February. Yesterday's market volume at 1.329
billion was significantly lower than the 2 billion transacted in
February
when the ST index was at 2450. This suggests that market players are
being
increasingly selective. Stock selection as such is critical at this
stage
and we prefer to look at stocks which appear to be emerging from
consolidation patterns.We still like the oil and gas sector and think
that
they represent low entry risk as most of the stocks in the sector
appear to
be close to breaking out of consolidation phases. Alternatively
investors
can look at high dividend yield stocks.


1. SembCorp Marine- The company announced today that it had secured a
contract worth US$480m from Petromena. Daily chart shows the stock
consolidating within a symmetrical triangle formation. Key resistance
is at
$3.00 has been taken out and the stock looks likely to head towards
next
resistance at $3.20.Recommend accumulating the stock at $3.04.

2. Pearl Energy - Price chart shows an unusually bullish formation as
the
stock is consolidating in a tight range near July- August 2005 highs.
This suggests the potential of a sharp breakout once the stock breaks
out
of the consolidated pattern. Transacted volume however is low and as
such
we would only advice recommend accumulating gradually. On the upside,
the
stock could rise by approximately 30 cents towards $2.30 once the stock
rises above $2.00.