Price action of Singapore Exchange (SGX SP) has been muted of late and we do not expect to see any changes in the short-term. The 14-day RSI stands at around 45 which indicates neutrality while the moving averages within the MACD chart is also looking flat. Coupled with the decrease in trading volume that reflects the lack of interest, we do not foresee a breakout move forthcoming in any direction.
Share price should be confined to the 4.74 – 5.35 range. Resistance at the 5.28 – 5.35 area is identified by the 100-day moving average and a series of daily highs while support at the 4.74 – 4.93 zone is attributed to the technical gap that occurred in Dec 08.
For our fundamental outlook on SGX, we have a SELL recommendation with a target price of S$3.95 based on 13x FY10F P/E.
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