STI and trading ideas on ComfortDelgro and SBS Transit

Technically, the daily RSI seems to be turning back in the positive direction while the MACD continues to trend lower following its negative crossover in early Aug; these mixed signals suggesting that momentum in the near term could be turning for the better while medium term momentum still remains bearish.

The index is already nearing the firm supports; the first is the gap at 2485-2503 (formed over 23-24 Jul); the second is at 2425 (significant peaks in early Jun and also near the 50-day moving average and lower Bollinger Band). These are critical levels and the subsequent reaction of the index at these levels could provide more insights to the sustainability of the index's medium to long term recovery.

On the upside, the index would face immediate resistance at 2600 (psychological level) with the more important cap found at 2681 (50% retracement of the plunge from 3906 to 1455).

ComfortDelgro Corporation Ltd: Worth a Second Look ? ComfortDelgro goes ex-dividend on 25 August. Coupled with a technical buy, investors might consider taking a second look.

SBS Transit Ltd: Buy on Weakness ? SBS Transit goes ex-dividend on 25 August. Coupled with a technical buy, keen buyers might want to watch prices and buy on weakness.

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ComfortDelGro - Strong rebound suggests more near-term upside

- ComfortDelgro could climb higher in the days ahead after staging a fairly strong rebound from the $1.26 key support – one that provided the base for 3 previous rebounds.

- With both the RSI and Stochastic indicators turning up sharply from their respective oversold regions and the MACD indicator looking to make a bullish crossover soon, they further support our view that the growing upside momentum for this counter.

- We expect the rebound to meet an initial resistance at $1.35 (minor peaks in mid May ’09 and early Jun ‘09), breaking which, the next key resistance is at $1.42 (Apr ’09 high)

- Beyond the $1.26 key support level, we expect subsequent support at $1.19 (Nov ’08 low).

Comfort Delgro’s PE differential with the MSCI Singapore Index has fallen to an extreme

Shares of Comfort Delgro (Buy, TP: $1.55) have been flat since February as investors preferred recovery to defensive plays but we think its time to consider accumulating the stock because the stock’s PE differential with the MSCI Singapore Index has fallen to an extreme (refer to chart 1). Based on historical behavior, the stock should start to narrow down this PE differential. At the very least, the stock should start to participate in the market’s rising trend. At the same time, if the market corrects, there will also be a flow back to defensives – a win-win situation.

Sell SPDR Gold Trust, ComfortDelgro, SMRT technically

SPDR Gold Trust (GLD SP; US$87.08) – SELL

• The Gold Trust has been fallen below its uptrend channel that begun since September last year. This is a very bearish signal. The 30-day SMA is also starting to turn downwards. This could be the start of a new downward spiral.

• Its MACD has just moved into the negative territory while RSI has hooked downwards after hitting the trend line at the 60-pts mark.

• Gold could continue to ease further to the US$80.00 and US$75.00 support levels next. Resistance is at US$91.00.

Gold Shares is the first gold-backed exchange-traded fund to be listed in Asia. Sponsored by the World Gold Trust Services LLC, the streetTRACKS® Gold Shares are designed to track the price of gold and trade like any stock on the exchange.

ComfortDelgro Corp (CD SP; S$1.34) – SELL

• The chart shows that the stock is still in its major downtrend. Until a breakout above the trend line resistance at S$1.45, the stock is under the control of bears.

• Technical indicators are mixed. MACD has confirmed its golden cross but its momentum is weak while RSI has turned down again.

• Sell into strength with resistance seen at S$1.33 and S$1.45. Prices could ease towards the S$1.16 levels again should the S$1.27 support fails.

ComfortDelGro's businesses include taxi, bus, rail, car rental and leasing, automotive engineering and maintenance services, inspection, test and assessment services, learner drivers’ instruction services, insurance brokerage services and outdoor advertising.

SMRT Corp (MRT SP; S$1.46) – SELL

• It fell below its medium term sideways trend of S$1.55-1.70 last week. Yesterday, the selling accelerated, sending the stock just shy of its October lows. A breakdown below S$1.42 could send the stock lower towards S$1.33 and S$1.25.

• Indicators continue to be negative with the RSI moving into the oversold region. Any rebound should be seen as a chance to unload given that the longer term charts are looking bearish.

• We maintain our sell call as we see more downside ahead. Resistance is at S$1.55 and S$1.57 (its 30-day SMA).

SMRT is Singapore’s premier multi-modal transport operator. It remains the dominant player in the nation’s rail network and its buses and taxis have a significant presence in Singapore’s vibrant transport landscape.

Technically sell SMRT, ComfortDelgo, Oceanus Group

SMRT Corp (MRT SP; S$1.62) – SELL

• It is stuck in its medium term sideways trend between S$1.55-1.70. A breakout on either side would only confirm the trend.

• However, in the near term, it could continue to climb further as its daily MACD is about to move into positive territory while RSI is also on the rise.

• The stock could inch a tad higher towards the S$1.70 resistance. A breakout above S$1.77 would be bullish for the stock. However, since the longer term charts are still showing weakness, it is less likely that the S$1.77 will be breached in the near term.

• On the other hand, a break below the support at S$1.55 is bearish and the stock could then fall to test the S$1.42 low again. We would prefer to stay with the bears right now due to the weakness in the longer term charts. Maintain sell for now.

SMRT Corp is a holding company with transportation as its core business. SMRT Corp through its wholly-owned subsidiary, SMRT, operates the MRT system in Singapore. It also operates the Bukit Panjang light rapid transit system, provides an executive bus service, a stored value farecard ticketing service and specialist engineering consultancy services.

ComfortDelgro Corp (CD SP; S$1.34) – SELL

• The chart shows that the stock is still in its major downtrend. Until a breakout above the trend line resistance at S$1.45, the stock is under the control of bears. On top of that, it is also trading below its 30-day SMA.

• Technical indicators are mixed. MACD has confirmed its golden cross but its momentum is weak while RSI has turned down again.

• Sell into strength with resistance seen at S$1.33 and S$1.45. Prices could ease towards the S$1.16 levels again should the S$1.27 support fails.

ComfortDelgro's businesses include taxi, bus, rail, car rental and leasing, automotive engineering and maintenance services, inspection, test and assessment services, learner drivers’ instruction services, insurance brokerage services and outdoor advertising.

Oceanus Group (OCNUS SP; S$0.11) – SELL

• Has fallen below its 5-month sideways trend. The old support at S$0.115 is now the immediate resistance for the stock. The next resistance is at S$0.13.

• MACD has stayed negative but its RSI has turned upwards again. Mixed signals suggest that the stock is still in consolidation.

• The stock could see a minor rebound to test its resistances but it may still be best to sell and wait. There are still no buy signals as yet, hence buyers may want to wait a while longer before getting in. Support is at S$0.095 and S$0.075

Oceanus is a marine aquaculture specialist focusing on large scale; land based industrialised production and sale of premium quality Japanese Abalones. Its principal activities are the research and development, breeding, intensive production and sale of this luxury product.