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.

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Singtel support see at $3.1

SingTel=$3.18 (Support seen at $3.10 which was previous resistance)

Singtel holding well

SingTel=$2.92, Above 200DMA, target =$2.80+($2.86-2.56)=$3.10

Buy Sarin Tech, Singtel, Ezra - Sell Santak Technically

Sarin Technologies (SARIN SP; S$0.125) – BUY

• Yesterday’s breakout from its 30-day SMA at S$0.11 is a positive sign. However, to reverse its medium term downtrend channel, it still needs to penetrate above S$0.14 before we would turn bullish.

• Although MACD is still rising, RSI is fast approaching the overbought territory. This bull-bear tussle may cap gains to the upside as momentum may stay weak after end-08 plunge.

• A minor correction may take place soon to neutralise the RSI indicator. Therefore, investors should accumulate only during technical pullbacks, possibly near its 30-day SMA. Cut loss if prices fall below S$0.105.

Sarin Technologies Ltd. develops, manufactures, and sells planning, evaluation, and measurement systems for diamond grading and gemstone production. The Company's products include diamond cut grading tools, rough diamond optimization systems, gemology tools, diamond color grading, and laser marking machines.

Singapore Telecommunications (ST SP; S$2.51) – BUY

• The stock has broken out of its medium term downtrend channel. It is currently struggling to hold above the trend line support. If prices fall below the 30-day SMA at S$2.48, it would suggest that the run-up is just a fake out.

• Technical indicators remain conducive. MACD is still rising towards the positive territory while RSI is neutral at 52.

• If prices were to hold above its 30-day SMA, we would expect a turnaround in sentiment, with resistance seen at S$2.63 and S$2.79. Buy on weakness. Cut loss however if prices fall below S$2.40, as next support is weaker at S$2.18 and S$2.00.

Singapore Telecommunications Limited operates and provides telecommunications system and services. The Company provides postal services, directory advertising and publishing. Singapore Telecommunications sells and maintains telecommunications equipment and provides mobile phone and paging service, computer network, and Internet and information technology services.

Ezra Holdings (EZRA SP; S$0.685) – BUY

• The stock has broken out of its 30-day SMA. The 2-week rally is likely to be extended towards the next resistance at S$0.745 and S$0.85. It needs to fill the S$0.99 gap to confirm a change in tone towards the bulls.

• Although MACD is positive, RSI is almost overbought at 69. This suggests that a temporary pullback may take place soon. However, we do not expect the correction to drag it below the 30-day SMA at S$0.56.

• Any pullback towards the 30-day SMA is a good buying opportunity. Cut loss if it tanks below S$0.54, which may signify the end of its short term rally.

Ezra Holdings Limited is an integrated offshore support and marine services company. The Company owns offshore support vessels and provides chartering and management services. Ezra also provides offshore support, marine supplies and engineering services.

Santak Holdings (SNTK SP; S$0.105) – SELL

• The stock is still trapped in a downtrend rally. With technical indicators showing more signs of weakness, a re-test of S$0.095 and S$0.08 supports is only a matter of time.

• MACD is poised to stage a negative crossover while RSI also hooks down, suggesting that prices may play catch-up on the downside.

• Investors should do well selling into strength. The bears are still in command with resistance seen at S$0.12 and S$0.135.

Santak Holdings Limited manufactures custom-made precision-machined components for hard disk drives, fiber-optic connectors and communication products. The Company also manufactures coils used as antennas for contactless smartcards, tags and transponders. Santak also trades custom-made electronic components such as heat sinks, printed circuit boards, connectors, LCD modules and solenoids.

Sell Singtel, SembCorp Marine, Oceanus Group

Singapore Telecom (ST SP; S$2.46) – SELL

• The stock is facing some tough resistance in a form of its long term trend channel resistance at S$2.65 and S$2.80.

• MACD is about to turn negative again but its RSI has already hooked down, suggesting that the upside is likely capped.

• A breakdown below the S$2.40 support would be bearish for the stock. The following support is at S$2.18 and S$2.00. Maintain sell on rebound for now. Only if the price breaches the S$2.80 resistance would a turnaround be confirmed.

Singapore Telecommunications Limited operates and provides telecommunications system and services. The Company provides postal services, directory advertising and publishing. Singapore Telecommunications sells and maintains telecommunications equipment and provides mobile phone and paging service, computer network, and Internet and information technology services.


Sembcorp Marine (SMM SP; S$1.40) – SELL

• The stock broke below its consolidation triangle support in January and it has been trading sideways since then. A breakdown below the S$1.36 support could signal that the downtrend is about to resume. The next support is at S$1.15, its October lows.

• Indicators are looking negative as both indicators have started to hook downwards. It is also below its 30-day SMA.

• It is crucial for the stock to stay above the S$1.36 support. We prefer to be on the selling side with resistance at S$1.53-1.55 and S$1.83.

SembCorp Marine Limited operates ship building, ship owning, ship repair and conversion. Through its subsidiaries, the Company provides equipment rental, cleaning and maintenance services, marine, general electronic, and electrical works. SembCorp Marine also trades copper slag, processes copper slag for grit blasting and building, as well as fabricates metal structures.


Oceanus Group (OCNUS SP; S$0.125) – SELL

• The stock tried to take out its 30-day SMA in January and February but failed. That prompted selling pressure to rise sending the stock lower to current levels. It is likely to test its October lows of S$0.115 soon. A break below could see the stock fall to S$0.095-0.10.

• Indicators stayed negative. Its RSI have yet to fall into the oversold region suggesting that there is still room on the downside.

• Maintain sell call for now until a bottom has been formed. Until then, avoid buying. Resistance is seen at S$0.15-0.155

Oceanus Group Ltd is a marine aquaculture specialist focusing on large-scale, land-based, industrialized production and sale of Japanese abalones.

SingTel ($2.53)

Support $2.48-50. Resistance $2.60-62.

Has lost 9.7% from $2.79 on Jan 29 to $2.52 today. Last pullback was 11.1% from $2.70 to $2.40 lasted 2 weeks compared to 3-4 days this time. A repeat of 11.1% fall will take it to $2.48.

Possible minor rebound later this week from $2.48-50. Stock near base of trend channel.