| | | | | Commentary | | The Straits Times index was flat on Wednesday. The index is below its 20d MA (@ 2922) and above its 50d MA (@ 2860). 37% of the index constituents are above their 20D MA (vs 37% the previous session) and 57% of the shares are above their 50D MA (vs 57%). On a daily basis, the index is posting a pullback, and is testing its 20-day moving average, as well its the key support at 2900. And the relative strength index is still above its 50% neutrality area. As long as 2900 is not broken below, we prefer a positive ST outlook, with another challenge of 2980 as likely. The HSI index rose 0.37% or 80.74pts to 21809.8 (day range: 21910.39 - 21755.85) on Wednesday. The index is below its 20d MA (@ 22476) and below its 50d MA (@ 22715). 12% of the index constituents are above their 20D MA (vs 9% the previous session) and 19% of the shares are above their 50D MA (vs 14%). On the daily chart, the index is rebounding on its key support at 21700, while the daily relative strength index is turning up from its oversold area around 30. As long as 21700 is not broken below, the index is expected to post a rebound to 22650 at first. |
| Straits Times Intraday: rebound expected. |  | Pivot: 2900.00
Our preference: long positions above 2900.00 with targets at 2911.00 & 2916.00 in extension.
Alternative scenario: below 2900.00 look for further downside with 2894.00 & 2888.00 as targets.
Comment: the RSI is mixed to bullish.
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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 | | Put | 2850.00 | 28/04/2017 | -0.4 | CBWW | Macquarie Bank | STI MBL EPW170428% | Medium risk | 2500.0 % | 6.9 % | | Put | 2750.00 | 28/02/2017 | -0.3 | BYNW | Macquarie Bank | STI MBL EPW170228% | High risk | 2500.0 % | 11.6 % | | Call | 3000.00 | 30/12/2016 | 0.3 | BWPW | Macquarie Bank | STI MBL ECW161230% | High risk | 2500.0 % | 14.5 % | | Call | 2950.00 | 28/02/2017 | BYMW | Macquarie Bank | STI MBL ECW170228% | Medium risk | 2500.0 % | 11.8 % |
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| Hang Seng Intraday: key resistance at 21900. | | Pivot: 21900
Our preference: short positions below 21900 with targets at 21765 & 21670 in extension.
Alternative scenario: above 21900 look for further upside with 22000 & 22180 as targets.
Comment: the RSI is mixed with a bearish bias.
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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 | 22600.00 | 27/02/2017 | 0.4 | CBYW | Macquarie Bank | HSI MBL ECW170227% | High risk | 1000.0 % | 14.4 % | | Call | 22400.00 | 30/03/2017 | 0.4 | CARW | UBS | HSI UBS ECW170330% | Medium risk | 1000.0 % | 11.4 % | | Call | 23000.00 | 30/03/2017 | 0.4 | CCEW | Macquarie Bank | HSI MBL ECW170330% | Medium risk | 1000.0 % | 13.9 % | | Put | 22400.00 | 26/01/2017 | CAPW | Macquarie Bank | HSI MBL EPW170126% | Medium risk | 1000.0 % | 11.7 % | | Put | 2130.00 | 17/03/2017 | -0.3 | CAZW | Macquarie Bank | HSI MBL EPW170317% | High risk | 800.0 % | 11.8 % | | Put | 22000.00 | 29/12/2016 | -0.6 | BZWW | Macquarie Bank | HSI MBL EPW161229% | Medium risk | 1000.0 % | 28.6 % |
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| United Overseas Bank Intraday: rebound expected. | | Pivot: 20.80
Our preference: long positions above 20.80 with targets at 21.10 & 21.20 in extension.
Alternative scenario: below 20.80 look for further downside with 20.65 & 20.45 as targets.
Comment: a support base at 20.80 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 United Overseas Bank |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Call | 21.00 | 03/07/2017 | 0.5 | CBFW | Macquarie Bank | UNITED OVERSEAS BANK MBL ECW170703% | Low risk | 12.0 % | 6.5 % | | Call | 19.50 | 05/06/2017 | 0.65 | BZYW | Macquarie Bank | UNITED OVERSEAS BANK MBL ECW170605% | Low risk | 12.0 % | 6.0 % | | Put | 19.00 | 03/07/2017 | -0.4 | CBGW | Macquarie Bank | UNITED OVERSEAS BANK MBL EPW170703% | Medium risk | 12.0 % | 7.8 % | | Put | 17.40 | 05/06/2017 | -0.3 | BZZW | Macquarie Bank | UNITED OVERSEAS BANK MBL EPW170605% | Medium risk | 12.0 % | 12.6 % |
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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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