Corporate Earnings and Middle East Development to dominate the headlines

Thoughts on Week Ahead:

Week 16 Oct 2023

Oil and gold prices experienced significant increases due to escalating tensions in the Middle East affecting oil supplies, and gold's appeal as a safe investment. Most major US banks performed better than expected, exceeding the predictions of financial analysts.

Looking ahead, the market will closely observe how it responds to earnings, considering the current high-interest environment and the evolving situation in the Middle East. Additionally, there will be a keen focus on China's economic data.

From a technical standpoint, the S&P500 index failed to surpass the 4,400 resistance level. Consequently, it is anticipated that the index will remain within the 4,220-4,380 range, or might test the 4,220 support level again. Investors will gauge the market's direction based on how individual stocks react to earnings announcements.

It is advised to closely monitor the movement of gold for potential trading opportunities. No specific trading setup is recommended for the upcoming week, adopting a conservative approach.

Headlines for Week Ahead:

Corp Earnings (BAC, GS, AXP, MS, JNJ, PG, NFLX, TSLA, ATT, TSM. Keppel Corp)

US Sept Econ data, US FED Chair speaks (Thurs)

China 3Q23, Sept Econ data, LPR fixing

SG Sept NODX

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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