SGX trading near its support

Recently SGX is trading at its support level around $7.65. The next strong support will be 7.50. Since the August of last year, SGX has never fall below this psychological price level. MACD indicator is also looking to improve for SGX with the recent trading days indicated by green bars and MACD line showing a expected turn for the positive, though like another other stock, SGX is also subjected to the general market risk and volatility in the short term.

The correction on STI continues

We witness a continuation of the correction on global markets and at a point in time, panic selling due to a technical error had caused Wall Street to plummet by 300 over points. Several global issues loomed over the global financial market. We continue to see the problems Europe is encountering. The Greece crisis continues; British faces a hung parliament which is hardly beneficial to the economy at such a point in time. Notable such a similar crisis to that of Greece back in 1997 in Thailand sparked of a contagion and the Asian Financial Crisis. Although the outcome would very likely be less severe, such a possibility would be interesting to keep in mind.

So far for the local market, STI has corrected by around 6%, and there is reason to believe that more downside is to come. Historically when global markets corrected, Singapore market usually undergo corrections of around 10%. It has been 3 weeks, and the time frame for corrections could well possibly go beyond this.

For the week I would like to cover the following stock: NOL.

NOL
NOL has gone through 14.3% drop from its highest closing price of 2.30 to 1.97 as of last week. This is probably a good stock to add into any portfolio. Barring any foreseen circumstances, a recovery in Singapore’s economy is expected by the government with the project GDP growth of 4.5%-6.5%. With our large external economy, trade is expected to pick up benefitting the shipping industry, since transport of goods is done primarily on the waters. Technically there seems to be support at $1.93.

The short term associated risk with investing in this counter in addition to the general market risk would be the 1Q2010 earning performance due 14 May, and the performance of the Baltic Dry Index (BDI).

Other stocks such as Yang Zi Jiang, SembCorp Marine are also good buys to tap into the growth in the shipping sector. Particularly for Yang Zi Jiang, there appears to be great buying interest over the past week.

Rounding Up the Week

It has been a decent week for Genting Singapore, for it has risen a whooping 10.9% within the last 2 trading days in the week from one of its lowest price in the month of April. I believe the reasons is expectations that Genting would be "profitable" as announced in the AGM, with its 1Q2010 results out on 13 May. Any experienced trader would know the term profitable is relative, and if actual numbers do not match expectations, it is going to be pull back Genting's share price. Up ahead, it will be interesting to watch if it could break the strong resistance at 1.04-1.05, and if that happens I believe could retest the 1.20 levels. Personally i think $1.00 is very likely, its just a matter of whether it could sustain at such a price level.

Ok enough said in this blog about Genting. Another interesting stock for the week is CapitalLand. It has fallen by 7.4% from 4.10 to close at 3.76. Such a fall in itself represents a good buying opportunity for the traders who based their strategy on buying on dips. The interesting sign is the doji formed on Friday, representing an equilibrium between the forces of demand and supply. This is a signal that its downtrend is possibly ending. The risk with this stock really comes from the government, whether it will implement further measures to cool the property market.