Weekly Market Outlook

Thoughts on the Week Ahead:
Week of June 24, 2024

Chinese equities continue to struggle to rebound following mixed economic data released in May. This is coupled with the PBOC's decision not to cut interest rates, maintaining the Renminbi against a strong US dollar.

The China A50 index is currently trading near our first support level at 12,000. If this level is breached, the next support level to watch is at 11,500.

In the US markets, the S&P 500 has shown upward momentum throughout the week but faces resistance at its current levels. The index remains biased upwards as long as it holds above its technical support range of 5,375-5,400. This Friday's release of the May PCE report could impact market direction.

The Straits Times Index (STI) continues to experience fluctuations, finding support around the 3,250 mark.

We favor selective long trades in the US and Singapore markets, while maintaining caution regarding Chinese and Hong Kong equities.

Headlines for the week:
- US May PCE, US Bank Stress Test Results
- China Jun PMI
- SG May CPI, Ind Prod

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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