| | | | | Commentary | | The Straits Times index was flat on Wednesday. The index is above its 20d MA (@ 3154) and above its 50d MA (@ 3117). 73% of the index constituents are above their 20D MA (vs 77% the previous session) and 80% of the shares are above their 50D MA (vs 83%). On a daily chart, while retreating from its recent highs, the index keeps trading above its ascending 20-day moving average. The relative strength index continues to stay above the neutrality level of 50, suggesting a lack of downward momentum. The short-term outlook is still bullish. As long as the key support at 3105 is not violated, the index is expected to grind higher toward the first upside target at 3240. The HSI index rose 0.57% or 139.32pts to 24400.8 (day range: 24400.8 - 24166.01) on Wednesday. The index is above its 20d MA (@ 24150) and above its 50d MA (@ 23830). 65% of the index constituents are above their 20D MA (vs 65% the previous session) and 70% of the shares are above their 50D MA (vs 72%). On the daily chart, the index remains in a consolidation phase while being supported by the ascending 20-day moving average. Below the 20-day moving average stands the 50-day moving average which is about the same as the short-term key support for the index (23800). At the same time, the relative strength index stays above the neutrality level of 50. Therefore the bullish short-term outlook is maintained. If the index succeeds in emerging to the upside upon completing the consolidation phase, it should resume its advance toward the immediate resistance at 24700. Therefore, the index shows reluctance to deepen its recent pull back / consolidation. In case the uptrend resumes, the index should continue its advance toward the immediate resistance at 24900. The level at 23800 remains the key support. |
| Straits Times Intraday: under pressure. |  | Pivot: 3184.00
Our preference: short positions below 3184.00 with targets at 3166.00 & 3157.00 in extension.
Alternative scenario: above 3184.00 look for further upside with 3190.00 & 3196.00 as targets.
Comment: even though a continuation of the technical rebound 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 | 3050.00 | 30/06/2017 | CDKW | Macquarie Bank | STI MBL ECW170630% | Medium risk | 2500.0 % | 10.3 % | | Call | 3000.00 | 28/04/2017 | 0.7 | CBVW | Macquarie Bank | STI MBL ECW170428% | Low risk | 2500.0 % | 11.6 % | | Put | 2950.00 | 28/04/2017 | -0.3 | CBXW | Macquarie Bank | STI MBL EPW170428% | High risk | 2500.0 % | 38.1 % | | Put | 2900.00 | 30/06/2017 | -0.3 | CDMW | Macquarie Bank | STI MBL EPW170630% | High risk | 2500.0 % | 14.7 % |
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| Hang Seng Intraday: caution. | | Pivot: 24360
Our preference: short positions below 24360 with targets at 24180 & 24100 in extension.
Alternative scenario: above 24360 look for further upside with 24470 & 24550 as targets.
Comment: the RSI is mixed and calls for caution.
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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 | 23600.00 | 27/04/2017 | -0.3 | CESW | Macquarie Bank | HSI MBL EPW170427% | High risk | 1000.0 % | 37.7 % | | Put | 23200.00 | 29/06/2017 | -0.3 | CEVW | UBS | HSI UBS EPW170629% | High risk | 1000.0 % | 14.0 % | | Put | 23200.00 | 29/06/2017 | -0.3 | CEVW | UBS | HSI UBS EPW170629% | High risk | 1000.0 % | 14.0 % | | Call | 24200.00 | 27/04/2017 | 0.6 | CCUW | Macquarie Bank | HSI MBL ECW170427% | Medium risk | 1000.0 % | 24.4 % | | Call | 23800.00 | 29/05/2017 | 0.6 | CFGW | Macquarie Bank | HSI MBL ECW170529% | Medium risk | 1000.0 % | 14.4 % | | Call | 24600.00 | 29/05/2017 | 0.4 | CFFW | Macquarie Bank | HSI MBL ECW170529% | High risk | 1000.0 % | 16.9 % |
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| DBS Group Intraday: under pressure. | | Pivot: 19.22
Our preference: short positions below 19.22 with targets at 19.00 & 18.90 in extension.
Alternative scenario: above 19.22 look for further upside with 19.32 & 19.42 as targets.
Comment: the RSI is capped by a declining trend line.
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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 | | Put | 18.00 | 02/10/2017 | -0.5 | CBNW | Macquarie Bank | DBS GROUP MBL EPW171002% | Medium risk | 8.0 % | 6.7 % | | Put | 16.80 | 30/10/2017 | -0.4 | CBOW | Macquarie Bank | DBS GROUP MBL EPW171030% | Medium risk | 8.0 % | 9.9 % | | Call | 19.50 | 10/07/2017 | 0.3 | CBJW | Macquarie Bank | DBS GROUP MBL ECW170710% | Medium risk | 8.0 % | 8.3 % | | Call | 18.00 | 03/07/2017 | 0.6 | CBDW | Macquarie Bank | DBS GROUP MBL ECW170703% | 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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