Singtel - Likely to move to higher end of $3.1 - 3.27 range

Trading interest has faded away in the past month following the stock’s failure to break recent $3.47-52 highs and sharp fall to below key historic $3.36-14 support area.

With rival index heavyweight stocks offering greater trading chances, ST languished, drifting to even below key historic $3.14 support ($3.10 low) but staying well above next $3.02-04 support.

As a result there had not been much positive technical signs to get trading ideas from as the counter fell well below its 13-day MA buy signal followed by periodic loss of 50-day MA support since mid-Aug.

However it managed to re-surface above 50-days after about a week of see-sawing, producing a mild rebound to $3.25 last week and $3.27 on Monday thanks to a cross between 13 and 50 days.

But this proved unsustainable as ST quickly plunged back to $3.14 at the day’s low and close and test of $3.11 in last 2 days with this morning’s low at $3.13.

Nevertheless, the MA cut is the first ray of hope that the stock could be coming out of its narrow consolidation and with the second quarter ending Sep 30 and analysts preparing to revise their forecasts, there should be some change of fortune soon.

First the stock will have to move back to the higher end of its $3.10- 27 range and this should be not too far away as the 13-days MA is flattening and showing signs of turning up for the first time since its downturn on Aug 5 which accompanied the plunge from $3.40 to $3.22, which demolished key historic supports from $3.36, $3.30 and $3.28.

Now it seems an uphill climb with $3.28 acting as first no-entry given that the Aug 31 high was $3.27.

But it should not be too difficult to break into $3.28-$3.36 as the 50- days (at $3.19) is still rising despite the past month’s weakness and with the potential for a more positive cut from a rising 13 (at $3.16) and 50-days, the counter should pull up back to this week’s high soon.

This should also bring it back to the rising trend channel which should be the case as nobody can argue that ST is destined to stay below this channel for more than a short spell of time.

Key fibonacci support and resistances are at $3.08 and $3.35, coinciding with the recent trading band and multi year figures with better chance of a move to a higher $3.14-$3.28 in coming days.

Sponsored Links