Weekly Market Outlook

Thoughts on the Week Ahead:
Week of July 22, 2024

TSMC’s revenue increased by 40% year-over-year, yet its stock price declined by 3.55% for the day. Similarly, Netflix Inc. saw a 17% revenue increase but experienced a 1.51% stock price drop.

Several factors could be contributing to the market’s volatility. These include valuations in the tech sector, interest rate expectations, and the potential impact of a Donald Trump re-election on taxes.

We anticipate similar market behaviour this week as other tech giants release their earnings reports. There are currently no significant technical patterns suggesting a market reversal. Therefore, we will monitor sell-offs and wait for price stabilization before entering trades.

Despite a recovery in the China A50 index, Hong Kong markets have not followed suit. Investor enthusiasm for Chinese markets remains subdued. The upcoming earnings season may offer more clarity on the equity market's direction.

The Singapore market has weakened, and the index is currently mixed, reflecting global equity market trends and export challenges.

We maintain a cautious outlook for the week ahead. No trading opportunities have been identified at this time and we will provide updates as conditions change.

Headlines for the week:
- US Corp Earnings (MSFT, GOOGL, TSLA, V, UPS, GM, IBM, F, SBUX, XOM)
- US Adv 2Q24 GDP, PCE report, PMI
- China LPR fixing, PMI
- SG Jun CPI, Ind Prod, MAS Policy

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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