Right timing: STI ready for a respite; Keppel rising to the challenge

The Straits Times Index looks somewhat tired following its rise from 2,881 in Feb to 3,207 in the first week of April, before easing slightly. Both quarterly momentum and short-term stochastics are likely to move sideways in the next three to four trading days. If they turn down, which is likely, the STI would have difficulty making much headway in the week of April 12–16. The immediate range is likely to be narrow, with the index entrenched between 3,150 to 3,220. The pause is likely to be temporary, with the uptrend resuming in a week or two. The original break above the narrow 3,071 to 3,118 range in the week of March 15–19 remains valid as does the upside of 3,368 to 3,377.

Keppel Corp has been trading within a range, following its initial rise of the low of $4.10 last year, and the breakout of the initial base formation at $4.50 in November 2020. While it has risen by more than $1.30 from its low, further upside looks very likely. First though, prices need to break above resistance at $5.50 or so. Quarterly momentum appears poised for an upturn at its equilibrium line. Meanwhile, the 50- and 100day moving averages are jostling for a positive cross. If these materialise as volume expands, a further breakout could materialise. In this event, the upside could be at $7. Support is at $5.45.

Sembcorp Marine has paused but this is likely to be temporary. Its upside of 27 cents, following the break above the base at 15.5 to 15.7 cents remains valid. Among its short term indicators, only 21-day RSI has turned down from an overbought reading of 81. In strong upmoves, these short term indicators can stay at relatively high levels for an extended period. SembMarine bounced off a multi-month/multi-year low at end-March, breaking out only on April 1. Support should be raised to 20 cents.

Elsewhere, Mandarin Oriental International is showing signs of getting ready for an upmove. Prices moved above the confluence of a resistance and the 50-day moving average at US$1.77 on Apr 5, indicating an upside of US$2.07. The move was accompanied by a breakout by quarterly momentum above its equilibrium line, and a modest expansion in volume. Mandarin Oriental’s share price may just be reacting to the increasing likelihood of herd immunity following the roll-out of vaccines in markets where it has a presence. Its parent Jardine Strategic Holdings is in the process of being acquired by its grandparent, Jardine Matheson Holdings.

Property stocks may take a breather. City Developments is retreating, but should find support at the $8.00–$8.08 range, despite appearing weak initially. Singapore Press Holdings’ moves are part of an upward progression. The chart pattern could turn out to be a bull flag, where prices retreat for around three days before turning up again. Support should be raised to $1.70, the start of a minor gap which could turn out to be a continuation gap. The next resistance appears at $2. E