| | | | | Commentary | | The Straits Times index was flat on Monday. The index is above its 20d MA (@ 3193) and above its 50d MA (@ 3170). 60% of the index constituents are above their 20D MA (vs 47% the previous session) and 63% of the shares are above their 50D MA (vs 63%).On a daily basis, the index remains on the upside, and lacks downward momentum. Both 20-day and 50-day moving averages should maintain the bullish bias. Meanwhile, the relative strength index has broken above a negative trend line with strong upward momentum. As long as 3185 holds as the key support, further upside is expected. The HSI index rose 0.86% or 215.25pts to 25371.59 (day range: 25385.72 - 25213.47) on Monday. The index is above its 20d MA (@ 24545) and above its 50d MA (@ 24258). 65% of the index constituents are above their 20D MA (vs 63% the previous session) and 67% of the shares are above their 50D MA (vs 65%). On the daily chart, the index has broken above its upper Bollinger band, and is surging for a higher top. The 20-day moving average stays firmly above the 50-day moving average, and the daily relative strength index is above its neutrality area at 50, showing strong upward momentum. To conclude, our ST bias should remain positive. |
| Straits Times Intraday: bullish bias above 3240.00. |  | Pivot: 3240.00
Our preference: long positions above 3240.00 with targets at 3280.00 & 3300.00 in extension.
Alternative scenario: below 3240.00 look for further downside with 3215.00 & 3200.00 as targets.
Comment: a support base at 3240.00 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 Straits Times |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Call | 3300.00 | 31/08/2017 | 0.4 | CFVW | Macquarie Bank | STI MBL ECW170831% | Medium risk | 2500.0 % | 8.6 % | | Call | 3300.00 | 31/08/2017 | 0.4 | CFVW | Macquarie Bank | STI MBL ECW170831% | Medium risk | 2500.0 % | 8.6 % | | Put | 3050.00 | 31/08/2017 | -0.4 | CFWW | Macquarie Bank | STI MBL EPW170831% | Medium risk | 2500.0 % | 14.1 % | | Put | 3050.00 | 31/08/2017 | -0.4 | CFWW | Macquarie Bank | STI MBL EPW170831% | Medium risk | 2500.0 % | 14.1 % |
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| Hang Seng Intraday: further advance. | | Pivot: 25000
Our preference: long positions above 25000 with targets at 25500 & 25730 in extension.
Alternative scenario: below 25000 look for further downside with 24750 & 24600 as targets.
Comment: the RSI advocates for further upside.
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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 | | Call | 25800.00 | 28/07/2017 | 0.4 | CGYW | Macquarie Bank | HSI MBL ECW170728% | High risk | 1000.0 % | 18.6 % | | Call | 25200.00 | 29/06/2017 | 0.5 | CGIW | Macquarie Bank | HSI MBL ECW170629% | Medium risk | 1000.0 % | 20.2 % | | Call | 25000.00 | 28/07/2017 | 0.5 | CGRW | Macquarie Bank | HSI MBL ECW170728% | Medium risk | 1000.0 % | 15.3 % | | Put | 24400.00 | 28/07/2017 | -0.4 | CGSW | Macquarie Bank | HSI MBL EPW170728% | High risk | 1000.0 % | 14.2 % | | Put | 24400.00 | 28/07/2017 | -0.4 | CGSW | Macquarie Bank | HSI MBL EPW170728% | High risk | 1000.0 % | 14.2 % | | Put | 24400.00 | 28/07/2017 | -0.4 | CGSW | Macquarie Bank | HSI MBL EPW170728% | High risk | 1000.0 % | 14.2 % |
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| OCBC Intraday: further advance. | | Pivot: 10.40
Our preference: long positions above 10.40 with targets at 10.70 & 10.81 in extension.
Alternative scenario: below 10.40 look for further downside with 10.25 & 10.11 as targets.
Comment: the RSI broke above 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 OCBC |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Call | 9.50 | 02/10/2017 | 0.7 | CBHW | Macquarie Bank | OVERSEA-CHINESE BANKING CORP MBL ECW171002% | Low risk | 7.0 % | 6.3 % | | Call | 10.20 | 13/11/2017 | 0.5 | CGMW | Macquarie Bank | OVERSEA-CHINESE BANKING CORP MBL ECW171113% | Low risk | 9.0 % | 6.2 % | | Put | 9.50 | 13/11/2017 | -0.3 | CGWW | Macquarie Bank | OVERSEA-CHINESE BANKING CORP MBL EPW171113% | Medium risk | 9.0 % | 7.5 % | | Put | 9.50 | 13/11/2017 | -0.3 | CGWW | Macquarie Bank | OVERSEA-CHINESE BANKING CORP MBL EPW171113% | Medium risk | 9.0 % | 7.5 % |
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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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