Singapore Stock Market Updates on 12/11/09

Morning Highlights

Our Focus For Today Is Still On Bank Stocks

ST Engineering broke out during open. However, the position is still not entered as market is trading near to its critical resistance. We need to exercise cautious.

In yesterday’s session, index experienced a breakthrough of the resistance at 2739.55. Please note that it is important to check if the breakout occurred with high volume as this will help us to analyse our own trades. In yesterday’s situation, market lacks the volume.

On average, the weekly volume traded so far is approximately 7.5578 billion. If yesterday’s breakout is valid, we should expect the daily volume to increase and exceed that of at least 2 billion. Yet, the total volume traded so far by Wednesday was only 3.7976 billion;  with only 1.1425 billion traded in yesterday’s session. Therefore, this signifies that market still lacks of momentum to push the index higher. All trades should be exercised with cautious until index can trade at least 2 billion per day.

Next, we have seen strong movements from the banks during these few days. We are waiting for setups to re-enter for the bank stocks. Among the 3 banks, UOB is the strongest, followed by DBS and lastly, OCBC.

1. DBS broke high of 14.16
2. OCBC failed to break high of 8.20
3. UOB broke high of 17.96

Here are  other shares to observe:

1. Venture falls 0.26 in the first 15 minutes
2. Yangzijiang broke high of 1.07, to wait for setups
3. Transpac Industrial has a surge in price and volume, looking for setups

Market has been trading sideways till 12:00 and starts to slide downwards. Will need to see how index performs in the afternoon session. We are still on the lookout for a pullback in bank stocks and then to find trade opportunities when the consolidation ends.

New IPO performance seems sluggish. The stock broke down yesterday’s low of 0.305 and closed at 0.295 at the end of the morning session.

News Updates

1. Macy's raises 2009 targets, notes 'progressively' improving business in third quarter‏
2. H-P to buy networking gear maker 3Com for $2.7 billion‏

Quick Picks: Here is a quick pick screen that we have designed to pick out potential stocks, both Bullish and Bearish. These are measured with emphasis on larger changes in price and volume.  <The Quick Picks referred herein contain overnight positions from Yesterday>

Bullish Stocks (Singapore)

	Symbol	Name	Entry	SL	TSL	TP	Remarks
1	HWHS	Hwa Hong	0.515	0.465	0.575	0.565	Overnight, Current Price at 0.59
2	STEG	ST Engineering	3.02	2.94		3.10	Not Entered… refer to new entry signal based on morning’s setup
	STEG	ST Engineering	3.08	2.94	2.98	3.18	Triggered, Current Price at 3.06

Stock Prices last updated at 17.30 (Singapore Time)

Here’s Our Mid Term Holding Opportunities for property shares.

1. Allgreen Properties – Buy at 1.21, Stop Loss at 1.04
2. City Development – Buy at 10.50, Stop Loss at 9.55
3. Wing Tai Holdings – Buy at 1.75, Stop Loss at 1.55
4. Ezra – Buy at 2.08, Stop Loss at 1.66 

Afternoon Highlights

The STI continued to head lower in the afternoon session. Though the global economy is showing sure signs of a recovery, doubts about the pace of recovery appear to be restraining some investors from building up big positions. Hence, gains are very much limited in most of the markets.

• Nippon Yusen to issue US$1.7b in shares
• Heeton, KSH, Tee to buy Mitre Hotel site for $121m
• Olam reports 27.5% net profit rise
• Soilbuild's Q3 net profit up 10%
• Banyan Tree narrows Q3 loss, sees FY09 profit
• ComfortDelGro's Q3 net profit up 15.1% to $55.6m
• CDL posts $193.6 million Q3 net profit
• Australian employment rose 24,500 in October, a second month of surprisingly strong growth which led investors to believe a further increase in interest rates was almost certain next month.

Corporate Announcements

OCBC: Successfully priced US$500 million of fixed rate subordinated notes. The notes will bear interest at the rate of 4.25% p.a from the issue date to the step-up date on 18 November 2014. If the notes are not redeemed or purchased and cancelled, the interest rate from the step-up date to the maturity date on 18 November 2019 will be reset to a fixed rate per annum equal to the aggregate of the relevant 5-year US Treasury benchmark rate and 2.997%.

Corporate Results Announcements:

• Ezion: 3QFFY09 net profits of S$4.1 million rose 67.7% year-on-year (yoy).
• Noble: 3QFY09 net profits of US$132.1 million fell 11% yoy.
• Wilmar: 3QFY09 net profits of US$652.9 million rose 35.3% yoy.

In Summary

STI reversed early gains and dropped 14.19 points to close at 2726.24 with 1.2852 billion traded. This pullback is very much expected and likely we would see index to consolidated in tight range in the coming session. 2746.73 is a pretty strong resistance, hence, it is not easy for the index to breakthrough. However, once index manages to breach this resistance decisively, high chance that it will climb all the way to 3000 points.

Last but not least, there is entry opportunity for SBI offshore. We are looking to Buy at 0.345, Stop Loss at  0.285 and Take Profit at 0.405. The stock ended at 0.29 today.