Weekly Market Outlook

Week Ahead: July 12, 2024

Investors are eagerly anticipating the next phase of growth under Tan Su Shan, a seasoned banker and former DBS intern, as she takes the helm at Singapore's largest bank by market capitalization.

Recent downgrades have been observed in the Singapore banking sector, with Citibank issuing a Sell rating on the three major Singapore banks, and UOB Kay Hian’s Jonathan lowering the sector's rating to Market Weight. This recent sell-off could present opportunities for averaging in, but investors should remain cautious or consider lowering their allocation, as impending U.S. rate cuts could compress the banks' net interest margins (NIM).

Market sentiment is currently at one of its lowest points, according to CNN's Fear & Greed Index. Our Long-Term Market Cycle Indicator remains bullish, suggesting that this level presents buying opportunities. However, caution is advised, as short-term momentum has not yet reversed to bullish, and a confirmed reversal is preferred.

Headlines for the week:

- US Corp Earnings (Home Depot, CSCO, Walmart, AMAT and DE)

- SG Corp Earnings (CICT, Wilmar, Genting SP, CaplandInvest, CDL, ST Eng)

- US Jul CPI, PPI, Retail Sales

- China CPI

- SG Jul NODX, final 2Q24 GDP

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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