| | | | | Commentary | | The Straits Times index fell 0.09% or 2.73pts to 2956.13 (day range: 2964.98 - 2949.87) on Friday. The index is above its 20d MA (@ 2874) and above its 50d MA (@ 2850). 93% of the index constituents are above their 20D MA (vs 87% the previous session) and 67% of the shares are above their 50D MA (vs 60%). Appx. 20% of the stocks are 'overbought' based on the RSI14 indicator. On a daily basis, the index has broken above a bullish flag pattern, and is continuing its up leg. Meanwhile the 20-day moving average has crossed above the 50-day one, and the relative strength index is well directed. As long as 2855 is not broken below, we prefer a positive ST outlook, with 3045 and 3100 as next targets. The HSI index fell 0.44% or 100.86pts to 22760.98 (day range: 22813.85 - 22660.22) on Friday. The index is above its 20d MA (@ 22594) and below its 50d MA (@ 22968). 74% of the index constituents are above their 20D MA (vs 72% the previous session) and 40% of the shares are above their 50D MA (vs 51%).The HSI index fell 0.44% or 100.86pts to 22760.98 (day range: 22813.85 - 22660.22) on Friday. The index is above its 20d MA (@ 22594) and below its 50d MA (@ 22968). 74% of the index constituents are above their 20D MA (vs 72% the previous session) and 40% of the shares are above their 50D MA (vs 51%). On the daily chart, the index remained under pressure below its 50-day moving average. Meanwhile the daily relative strength index is around 50 and lacks upward momentum. As long as the key resistance at 23620 is not surpassed, it is expected to return to the first downside target at 21700. |
| Straits Times Intraday: the upside prevails. |  | Pivot: 2940.00
Our preference: long positions above 2940.00 with targets at 2980.00 & 3000.00 in extension.
Alternative scenario: below 2940.00 look for further downside with 2915.00 & 2890.00 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
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| |  | | Opinion published is a ST (short-term) view. Green Lines Represent Resistance | Red Represents Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced | | Associated Warrants for Straits Times |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Call | 3000.00 | 30/12/2016 | 0.4 | BWPW | Macquarie Bank | STI MBL ECW161230% | High risk | 2500.0 % | 19.7 % | | Call | 2950.00 | 28/02/2017 | 0.5 | BYMW | Macquarie Bank | STI MBL ECW170228% | Medium risk | 2500.0 % | 9.8 % | | Put | 2800.00 | 30/12/2016 | -0.3 | BWOW | Macquarie Bank | STI MBL EPW161230% | High risk | 2500.0 % | 39.4 % | | Put | 2750.00 | 28/02/2017 | BYNW | Macquarie Bank | STI MBL EPW170228% | High risk | 2500.0 % | 12.2 % |
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| Hang Seng Intraday: under pressure. | | Pivot: 22870
Our preference: short positions below 22870 with targets at 22630 & 22550 in extension.
Alternative scenario: above 22870 look for further upside with 23000 & 23100 as targets.
Comment: the RSI is mixed to bearish.
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| |  | | Opinion published is a ST (short-term) view. Green Lines Represent Resistance | Red Represents Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced | | Associated Warrants for Hang Seng |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Put | 22400.00 | 26/01/2017 | -0.4 | CAPW | Macquarie Bank | HSI MBL EPW170126% | High risk | 1000.0 % | 15.8 % | | Put | 2130.00 | 17/03/2017 | -0.3 | CAZW | Macquarie Bank | HSI MBL EPW170317% | Medium risk | 800.0 % | 9.2 % | | Put | 22000.00 | 29/12/2016 | -0.3 | BZWW | Macquarie Bank | HSI MBL EPW161229% | High risk | 1000.0 % | 22.8 % | | Call | 23800.00 | 26/01/2017 | 0.3 | CANW | Macquarie Bank | HSI MBL ECW170126% | High risk | 1000.0 % | 21.6 % | | Call | 23000.00 | 26/01/2017 | 0.5 | CAOW | Macquarie Bank | HSI MBL ECW170126% | Medium risk | 1000.0 % | 18.2 % | | Call | 24800.00 | 29/05/2017 | 0.3 | CATW | UBS | HSI UBS ECW170529% | Medium risk | 1000.0 % | 10.0 % |
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| DBS Group Intraday: bullish bias above 17.60. | | Pivot: 17.60
Our preference: long positions above 17.60 with targets at 18.20 & 18.45 in extension.
Alternative scenario: below 17.60 look for further downside with 17.30 & 17.12 as targets.
Comment: a support base at 17.60 has formed and has allowed for a temporary stabilisation.
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| |  | | Opinion published is a ST (short-term) view. Green Lines Represent Resistance | Red Represents Support Levels | Light Blue is a Pivot Point | Black represents the price when the report was produced | | Associated Warrants for DBS Group |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Call | 19.50 | 10/07/2017 | 0.4 | CBJW | Macquarie Bank | DBS GROUP MBL ECW170710% | Medium risk | 8.0 % | 8.8 % | | Call | 18.00 | 03/07/2017 | 0.5 | CBDW | Macquarie Bank | DBS GROUP MBL ECW170703% | Low risk | 8.0 % | 6.6 % | | Put | 15.50 | 12/06/2017 | -0.3 | CAJW | Macquarie Bank | DBS GROUP MBL EPW170612% | Medium risk | 8.0 % | 8.9 % | | Put | 16.50 | 03/07/2017 | -0.4 | CBEW | Macquarie Bank | DBS GROUP MBL EPW170703% | Medium risk | 8.0 % | 7.0 % |
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 | MA (50) & MA (20): The most simple trend indicators are Moving Averages. They simply correspond to an average calculated on an evolving time scale (20 and 50 periods): every day, the oldest value (often taken at the close) in the average calculus is replaced by the value of the new session.
Bollinger bands: are represented by 3 different bands and are derived from moving averages. The middle band corresponds to a simple moving average (MA (20)). The level of the upper band, in every point, corresponds to the sum of the level of the middle band and twice the value of the standard deviation associated to the 20-day moving average. Reciprocally, the level of the lower band corresponds to the level of the middle band diminished by twice the value of the standard deviation associated to the 20-day moving average. An envelop of the stock price is thus determined. This makes it possible to then identify the variation margin in which the stock should stay almost systematically. In the case of a stock following a Gauss law, 95 % of the trades will thus occur between these bands.
RSI (14): the Relative Strength Index aims at establishing a reference scale independently from the stock prices levels themselves. As the RSI has boundaries (0 and 100), it then becomes very easy to determine overbought (above 70) and oversold (below 30) areas. In addition, just as on prices themselves, supports and resistances can appear, especially when nearing the neutrality zone (near 50). Thus, the RSI is one of the most commonly used counter-trend indicators.
It is based on the average of rises and drops of price, with the formula:
RSI = 100 - [100 / (1 + RS)]
Where RS represents the average of up closes divided by the average of down closes on the considered period (14). | |
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