Thoughts on Week Ahead 27 Feb 2023: Stock Market Indices Nearing Technical Support

The equity market has been adversely affected by uncertainties surrounding interest rate hikes, causing it to decline. However, this decline has brought the S&P 500 and Hang Seng Index closer to their respective key support levels of 3,900 and 19,500.

Following the release of hot PCE data on Friday, the market is now pricing in a peak US FED rate hike of 5.50% for the rest of 2023, which is being driven by strong US consumer spending. As a result, there is an interest in closely monitoring the technical price action at the above-mentioned support levels.

Currently, there are no trading ideas for the upcoming week, but there is a preference for companies that focus on AI-related and reopening themes.

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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