On the corporate earnings, SingTel 1QFY09 result was disappointing missing market expectation and so does CityDev. On the other hand, commodity stocks like Wilmar, GoldenArgi, Noble Grp, First Resource and IndoArgi were able to record strong profit performance for 1H FY08 mainly due to the rising crude oil price. However, with the sliding of the crude oil price, concern were will they able to maintain such performance for the rest of FY08. List of companies reporting the coming week is:
1. Jaya 18th Aug 08
2. ASL Marine 20th Aug 08
3. Olam 28th Aug 08
As majority of the companies have already reported their earnings, the direction of SG market for the coming week should be tracking the global markets, crude oil price and perhaps what can be extracted about Singapore economy from PM Lee's National Day Rally. Note also there were quite an intense selling down of defensive stocks ( SPH, SingPost, ST Engg, SMRT, etc ) and Reits ( Ascendasreit, capitamall, capitacomm, mapletreelog, cambridge, suntec, etc ) for last week. As have seen from the recent Reits' earning report, most of them are doing well and should be able to maintain their strong performance for rest of the year and yet share prices were driving down without any change in their fundamental. This could be a possible scenario whereby funds are switching out of these stocks and channel the capital to push up stock prices for blue chips and growth stocks. Another possible scenario is funds switching out and channel the capital back to US markets.
Technically, STI is relatively weaker than DJI, Nasdaq, S&P500, HSI, Nikkei and even SSE. The immediate support for STI now lies at 2769; the lower Bollinger band limit following that would be the March 08 low of 2743. Upside probably capped at 2879; the median Bollinger band. None of the indicators showing any sign of a strong upside for the moment. In ADX, the DI- is way above the DI+ and no sign of DI+ trying to cutting up. MACD is relatively flat and lying just below the zero line in the negative region. RSI and Stochastic are just hovering around the 30% and 20% level respectively, showing no sign of any strength in rebound up in near-term. Many analysts are believing STI might break the March 08 low level and head down towards the 2600 - 2650 level before a strong rebound could occur. DJI, Nasdaq and S&P500 are presently showing sign of rallying up and would be interesting to see whether STI has the momentum to follow that and negate the current downtrend.
