20/04/2009 Market Update

	Close	Change	Low	High			Share	Value
STI	1,874	-21	1,857	1,896		Volume Traded	1.72 bil	$1.06

The volume traded was even lesser today. Same thing, the activity was concentrated on the penny counters. STI managed to stay relatively resilient for most part of the day as HSI lent strength to our market. But the rapidly plunging US futures made the STI matched down at closing.

From this low trading activity, it is exactly what I had mentioned before: investors are cautiously waiting for something to happen. There are 2 possibilities here: (1) the market is consolidating for a further rally soon just like 31 March, or (2) setting the stage for the pullback. At least I can say the view (2) is very likely to apply to those speculative penny counters because I deduce that many traders are having short-term positions in them currently. For the blue chips, the low turnover volume could mean investors are serious about holding on to them, or simply because they have not decided on selling their good counters yet. This is a tricky situation.

Nevertheless, STI chart seems quite determine to retreat towards 1,835 unless the US tonight produces some pleasant surprise. I continue to recommend that we load up good counters around 1,835 region and/or near the 14-day MA of the blue chips.

Banking counters:

They are starting to face stronger downwards pressure today after they led the rally up for so many days. This behavior might have something to do with bad rumors on the stress test results for the 19 top US banks. I think there is further downside for the banks in the near term. On another note, DBS and OCBC are quite near to their 14-day MA supports, but in terms of price-to-book value, DBS is slightly cheaper at 1.06 times while OCBC is at 1.18 times.

CMT:

It is finally starting to show signs of weakness after holding up for so many days. Let's watch on first.

Note: Kindly read my first post, About Myself, on my disclaimer. Thank you.