Market Technician

  The equities market enjoyed a surge last week, bolstered by the successful resolution of the US debt ceiling crisis. Additionally, the release of promising US jobs data and a better-than-expected report on China's manufacturing sector offered further impetus to the markets. In the East, despite ongoing efforts to stimulate its economy following the lifting of lockdown measures, China continues to grapple with a challenging recovery process. This struggle is primarily due to an economic crackdown and weak exports. As a result, market analysts anticipate that Beijing will amplify its stimulus strategies to rekindle domestic growth. Based on these positive signals and the prospect of increased stimulus, alongside appealing valuations, we anticipate this upward trend to persist. JD.com (9618, HK): Expecting Trend Change . Weak supply effort observed with relative strength and fund flow improving. We expect rebound to continue towards HK$160 level, with stop loss price below HK$122.7

  Technical Breakthrough Last week marked significant gain in the financial markets; not only did we witness progress in the debt ceiling, but the S&P 500 also broke above the key 4,180 resistance point after weeks of consolidation. Given the break and the prevailing trading character, we anticipate the market index to approach 4,300 . Investor confidence continues to surge, spurred by the growth of mega tech and semiconductor stocks. The underlying theme driving these price movement is Artificial Intelligence (AI) demand. Our strategy remains consistent - we continue to hold long positions in the market, eyeing for any signs of strength in stocks. One noteworthy performer is Pinduoduo (PDD, US) , which successfully broke above its downtrend line. Coupled with the Fund Flow Index (FFI) in positive territory and Relative Strength (RS) breaking above its zero line, we foresee the price gaining more momentum as consumer sentiment and spending in China improve. Headlines for Week Ahead

 

  Thoughts on Week Ahead: Week 16 May 2023 All Eyes on Debt Ceiling A short write up for the week ahead. Nil major news. Market, technically directionless, is closely monitoring the US Debt Ceiling deal within US Congress. Quick look at SPY ETF flow so far suggesting nil major tail risk priced in by major market participants.  We did not come across tactical ideas for the week ahead and will be on the lookout.  Headlines for Week Ahead: US Apr Retail Sales China Apr Ind Prod and Retail Sales US FED Chair Powell and Former chair Bernanke to speak at conference  SG Apr NODX SG Earnings (SIA) US Earnings (Home Depot, Walmart, Target China Earnings (Baidu, Tencent) Blog Disclaimers apply

  No rate cut please In light of the US regional bank run situation, numerous voices across social media and mainstream media are advocating for a rate cut. However, as market participants, we believe that it would be more beneficial to see US Federal Reserve to hold steady on the current interest rates. This stance signifies that the economy possesses the strength to endure current high rates. If the Federal Reserve were to initiate a rate cut, it would signal an expectation of an impending economic contraction. Therefore, from an investor's standpoint, a pause in interest rates is preferred. Over the weekend, we did not identify any tactical trades of interest, but we will continue to keep a close eye on the market for potential opportunities. Headlines for Week Ahead: US CPI & PPI China Trade data China CPI US Earnings (Paypal, Walt Disney) SG Earnings (OCBC, Capland Invest, AEM, Seatrium) Blog disclaimers apply

Investors are increasingly attracted to the Singapore Investment Grade Bond ETF (MBH) , as they anticipate a more favorable interest rate outlook. Current upward trend is expected to persist, given that the previous downtrend has been breached and the current trend remains unbroken. The ETF's relative strength compared to the Straits Times Index (STI) further indicates that demand for the ETF continues to outpace the broader market. Blog disclaimers apply.