STI – the week ahead

Asian stocks continued their upwards ascent for the eighth week. The MSCI Asia Pacific Index rose 0.4% to 124.85 after better than expected economic news on the U.S. employment jobs front.
On the charts, STI managed to close the gap 2,943 – 2,974 (formed on 5-8 Aug 2011). It reached an intraday high of 2,995 which was near my resistance level of 2,997 mentioned last week but closed at 2,960 on concerns of the Greek debt problems. Market watchers would be watching whether the Greek will pass the parliamentary approvals on further austerity measures today (Sunday).
Just a recap on the stocks which I mentioned last week:
a) China Animal: It trades to an intraday high to $0.265 and closed at 0.250 (again) on Friday. Nothing new. It is still trapped within the range 0.240 – 0.255.
b) Kreuz: It indeed reached an intraday high of $0.410 on Wed (target was $0.410 – 0.450) after breaching 0.370 convincingly on last Monday.
Looking ahead to this week, oil & gas plays have rallied a lot. Sembmarine, KepCorp, Ezra went up 31%, 17% and 39% respectively. However, there is a laggard Technics oil and gas (a Singapore company with mkt cap of $200m) which appreciated about 5% year to date and gives about 7% dividend yield. Ave analyst target price is $1.29 vs Friday’s closing price of $0.900. Current order book is at an all time high at S$141m, out of which an estimated 70% are higher margin contract engineering projects (GM:35-38%). The main bulk of the order books is likely to be recognised this year, translating to a potential record year. Analysts expect Technics to give out about 6-8 Sg cents for the whole of this year. Insiders have been buying back 2.3m shares in Dec @an estimated price of 0.845 and about 1.5m shares @$0.870 (rough estimation). Results to be out on 13 Feb, Mon, after market close.
For the avoidance of any doubt, with regard to Technics, I am only pointing out its laggard year to date share price performance vis-à-vis the other oil and gas counters (albeit not direct peers). It is noteworthy that Technic may not have risen much this year because it did not drop as much as the other oil and gas counters last year. As usual, I do not imply that it will definitely rise or fall. I am just stating my observations only.
Lastly, it is extremely important to note that the above is my personal opinion and may not cater to your specific risk profile etc. It is a question of when to buy / sell and what to buy / sell differs greatly from individual to individual. Furthermore, it is extremely important to bear in mind that the market outlook is never static. It can change suddenly if there are sudden big events unfolding from the market – some events can happen as quickly as overnight.
STI supports and resistances are:
Current: 2,960.00
Support 1: 2,944
Support 2: 2,935
Support 3: 2,905
Support 4: 2,877 – 2,882
Resistance 1: 2,966
Resistance 2: 2,997
Resistance 3: 3,025
Resistance 4: 3,044
*Supports and resistances are not static levels. They may be subject to change daily.
All the best for your investment and trading!
Information sources: Various sources such as Bloomberg,, Dow Jones, forex calendar, Reuters, SGX, Yahoo Finance, and Business Times etc.
*The above is an abridged version. The original version was sent to my clients on Sunday.
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