<TABLE cellSpacing=0 cellPadding=0 width=593 border=0><TBODY><TR vAlign=top><TD><TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published November 25, 2008
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>CHARTPOINT
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>STI likely to consolidate further
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BASED on Elliot Wave theorem, the Straits Times Index is currently trending in Wave-B downtrend of its Wave-4 cycle. At the macro front, the decline in commodity and oil prices is making a positive impact on the US external deficit and US dollar strength.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Coupled with the rising aversion to global risk, there is anecdotal evidence to suggest that US capital outflow to Asia is slowing down somewhat as funds re-balance their weightings in favour of US dollar assets.
If this prognosis is accurate, then Asian markets will likely consolidate further as the US dollar strengthens. For Singapore, MAS's shift towards a zero appreciation policy for the Sing dollar on Oct 9 had led to speculative shorts on the Sing dollar. To date, the Sing dollar/US dollar exchange rate has depreciated from $1.47 to $1.53; the next resistance to watch is $1.543, followed by $1.592. We believe currency exchange levels will have a deterministic role in this phase of the STI's consolidation with index support at 1,570. While it could be a wait before the Wave-C rebound arrives, potentially, a breakout of the recent 1,933 high achieved this October is plausible.
Hyflux has fallen below the $1.48 support as at yesterday's close. MACD has reaffirmed this price trend weakness now that it is below the nine-day EMA. With downside risk to $1.29, investors can consider short selling the stock with KECFD.
By Ken Tai Chee Ming, CMT
senior technical strategist
KELIVE RESEARCH
(part of the Kim Eng Group)
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>CHARTPOINT
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>STI likely to consolidate further
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>BASED on Elliot Wave theorem, the Straits Times Index is currently trending in Wave-B downtrend of its Wave-4 cycle. At the macro front, the decline in commodity and oil prices is making a positive impact on the US external deficit and US dollar strength.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Coupled with the rising aversion to global risk, there is anecdotal evidence to suggest that US capital outflow to Asia is slowing down somewhat as funds re-balance their weightings in favour of US dollar assets.If this prognosis is accurate, then Asian markets will likely consolidate further as the US dollar strengthens. For Singapore, MAS's shift towards a zero appreciation policy for the Sing dollar on Oct 9 had led to speculative shorts on the Sing dollar. To date, the Sing dollar/US dollar exchange rate has depreciated from $1.47 to $1.53; the next resistance to watch is $1.543, followed by $1.592. We believe currency exchange levels will have a deterministic role in this phase of the STI's consolidation with index support at 1,570. While it could be a wait before the Wave-C rebound arrives, potentially, a breakout of the recent 1,933 high achieved this October is plausible.
Hyflux has fallen below the $1.48 support as at yesterday's close. MACD has reaffirmed this price trend weakness now that it is below the nine-day EMA. With downside risk to $1.29, investors can consider short selling the stock with KECFD.
By Ken Tai Chee Ming, CMT
senior technical strategist
KELIVE RESEARCH
(part of the Kim Eng Group)
</TD></TR></TBODY></TABLE>
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