Weekly Market Ahead

Thoughts on the Week Ahead:

Week of 17 June 2024

"No Elon, No Tesla" – Tesla shareholders have spoken, with more than 70% approving Elon Musk’s pay package. With his position secured, the market will be looking for more commercial innovations from Tesla Inc.

In the US markets, over the past weeks, tech companies have outperformed the broader market, with a 38% gain compared to the broader market's 19% gain since 27 October 2023. Therefore, to achieve alpha or increase the probability of a higher win rate, positioning and tactical trades in technology companies are preferred.

The Straits Times Index (STI) retraced lower since hitting the 3,350 resistance level, with immediate support at 3,250.

The China Market (China A50) is in the technical support zone, and we are looking for more evidence of market demand to confirm any theory of a trend reversal.

Investors could consider adding to bond ETFs (e.g. ZROZ ETF) for both the US and Singapore markets in batches, as bond prices continue to display positive momentum amid a less hawkish outlook.

On tactical trades, we will lookout for long positions in US tech companies while remain cautious on the overall market. For China markets, we are looking for signs of bottoming. Lastly, we will be very selective with trades in the Singapore market.

Headlines for the week:

- US Market Close on Wed

- China LPR fixings

- SG May NODX Report, Market Close on Mon

Disclaimers apply

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

DBS Group Holdings (D05): Upward Move Expectations

DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator. Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply

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