Singapore Market

Singapore market- Our initial expectation was for the ST index to top
out
near 2620. We also stated that a drop below 2570 would confirm a
downtrend.
That did not materialise. The index rebounded off the 2578 level and
headed towards 2666 mainly due to sharp gains in banking stocks. Even
so,
there are signs that the index has difficulty hanging on to the gains.
The
high established at 2666 was re tested on Monday but the gains were
quickly
erased the next day. By most accounts, we think the market is
overstretched. RSI indicator is overbought not only on daily and weekly
charts but also on monthly charts outlining price action over 20 years.
Thus from a statistical perspective, there are valid reasons to at
least
expect a correction in the Singapore bourse.We are also not seeing a
broad
based rally in index stock but more sudden sharp movements and these
are
quickly reversed. SIA which reported a weak 4th quarter result could
also
see it's share price coming under pressure. Chart formation shows
strong
resistance near $14.80 and also a potential double top formation.
We see little upside catalyst for the Singapore bourse at current
levels
and would prefer to await opportunities as opposed to chasing the same.
A
drop below 2620 would confirm a near term bearish set-up.

Best Regards

K Ajith

64195411