| | | | | Commentary | | The Straits Times index fell 0.12% or 4.02pts to 3215.51 (day range: 3221.23 - 3203.75) on Wednesday. The index is below its 20d MA (@ 3232) and above its 50d MA (@ 3215). 43% of the index constituents are above their 20D MA (vs 47% the previous session) and 40% of the shares are above their 50D MA (vs 50%). On a daily basis, the index is testing the support of its 50-day moving average, as well as the horizontal support at 3185. And the 20-day moving average still stands above the 50-day moving average. Even though a continuation of the consolidation in current stage cannot be ruled out, its extent should be limited. As long as 3185 holds as the key support, further upside is expected. Alternatively, a break below 3185 will call for further consolidation as likely. The HSI index fell 0.61% or 156.49pts to 25683.5 (day range: 25821.36 - 25625.71) on Wednesday. The index is below its 20d MA (@ 25825) and above its 50d MA (@ 25258). 33% of the index constituents are above their 20D MA (vs 40% the previous session) and 56% of the shares are above their 50D MA (vs 67%). On the daily chart, the index is consolidating around its 20-day moving average, while the 50-day moving average is rising and still maintains a bullish bias. In addition, the daily relative strength index is still above its neutrality area at 50, lacking downward momentum. As long as 25400 is not broken below, further rise is likely. |
| Straits Times Intraday: the downside prevails. |  | Pivot: 3230.00
Our preference: short positions below 3230.00 with targets at 3200.00 & 3190.00 in extension.
Alternative scenario: above 3230.00 look for further upside with 3240.00 & 3250.00 as targets.
Comment: the RSI is bearish and calls for further decline.
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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 | 3250.00 | 31/08/2017 | -0.7 | CHAW | Macquarie Bank | STI MBL EPW170831% | Low risk | 2500.0 % | 14.5 % | | Put | 3050.00 | 31/08/2017 | -0.4 | CFWW | Macquarie Bank | STI MBL EPW170831% | High risk | 2500.0 % | 19.1 % | | Call | 3300.00 | 31/08/2017 | 0.3 | CFVW | Macquarie Bank | STI MBL ECW170831% | High risk | 2500.0 % | 10.4 % | | Call | 3300.00 | 31/08/2017 | 0.3 | CFVW | Macquarie Bank | STI MBL ECW170831% | High risk | 2500.0 % | 10.4 % |
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| Hang Seng Intraday: under pressure. | | Pivot: 25830
Our preference: short positions below 25830 with targets at 25640 & 25560 in extension.
Alternative scenario: above 25830 look for further upside with 25950 & 26050 as targets.
Comment: as long as 25830 is resistance, look for choppy price action 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 | | Put | 24688.00 | 28/07/2017 | -0.3 | CHIW | Bank Vontobel | HSI VT EPW170728% | High risk | 1000.0 % | 29.0 % | | Put | 25200.00 | 28/07/2017 | -0.4 | CHPW | Macquarie Bank | HSI MBL EPW170728% | High risk | 1000.0 % | 24.9 % | | Put | 25200.00 | 28/07/2017 | -0.4 | CHPW | Macquarie Bank | HSI MBL EPW170728% | High risk | 1000.0 % | 24.9 % | | Call | 25800.00 | 28/07/2017 | 0.4 | CGYW | Macquarie Bank | HSI MBL ECW170728% | High risk | 1000.0 % | 24.6 % | | Call | 26400.00 | 30/08/2017 | 0.3 | CHLW | Macquarie Bank | HSI MBL ECW170830% | High risk | 1000.0 % | 18.0 % | | Call | 25000.00 | 28/07/2017 | 0.6 | CGRW | Macquarie Bank | HSI MBL ECW170728% | Medium risk | 1000.0 % | 15.7 % |
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| United Overseas Bank Intraday: the downside prevails. | | Pivot: 23.20
Our preference: short positions below 23.20 with targets at 22.80 & 22.60 in extension.
Alternative scenario: above 23.20 look for further upside with 23.40 & 23.65 as targets.
Comment: as long as 23.20 is resistance, look for choppy price action 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 United Overseas Bank |
| Type | Strike | Expiry | Delta | Ticker | Issuer | Name | Risk | Conv ratio | Eff. Gearing | | Put | 21.50 | 16/10/2017 | -0.3 | CGUW | Macquarie Bank | UNITED OVERSEAS BANK MBL EPW171016% | Medium risk | 12.0 % | 9.0 % | | Put | 21.50 | 16/10/2017 | -0.3 | CGUW | Macquarie Bank | UNITED OVERSEAS BANK MBL EPW171016% | Medium risk | 12.0 % | 9.0 % | | Call | 24.50 | 16/10/2017 | 0.3 | CGVW | Macquarie Bank | UNITED OVERSEAS BANK MBL ECW171016% | Medium risk | 12.0 % | 10.8 % | | Call | 22.50 | 01/11/2017 | 0.5 | CBRW | Macquarie Bank | UNITED OVERSEAS BANK MBL ECW171101% | Low risk | 12.0 % | 7.8 % |
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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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