Weekly Market Update

Thoughts on the Week Ahead:

Week of 10 June 2024

Yes, at 39, Cristiano Ronaldo, will be joining Portugal's squad this coming weekend for the UEFA Euro Cup 2024. And who do you think will be crowned the Kings of Europe this year?

Most of our focus will be on the upcoming US FED FOMC announcement. The market largely expects no changes to the target rate. However, our eyeballs and ears will be on the FED Chairman’s speech, particularly if the committee continues to believe that inflation has plateaued, after a hotter-than-expected jobs report on Friday.

Markets are expected to be muted ahead of the announcement, and Chairman Powell’s speech could lead to directional moves for bonds and equities. Nvidia’s stock spilt on Monday will also be watched by many, if a “cheaper” Nvidia would attract more investors interest.

Technically, the S&P 500 is hovering below its key resistance area of 5,426, with our Fund Flow Index (FFI momentum Indicator), indicating uncertainties in the market. We will be extra cautious for the coming week.

Meanwhile, both the HSI and China A50 continue to retreat, searching for technical support, after a recent spree of dilutive convertible bonds issued by Chinese tech companies.

Nil trading set up observed for the week ahead, and we will update when we identify any.

Headlines for the week:

- US FOMC, CPI, PPI

- China CPI

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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