General travel to NZ and Brunei – Getting our engines started

STI does not look excited at the moment but it seems like the government is making a move for the aviation industry. This is a signal that our battle with COVID is starting to end. In the past week, SIA announced that they have burned through half of their monies raised in the rights issuance in 2 months and that means that SIA has another 2 months before red lights will flash again. The move to allow general travel to Brunei and New Zealand are the first few dominos before others fall. No doubt it will take some time but this will help restore confidence to investors including those who are skeptical eventually.

STI – Updated Daily Chart

The daily chart reveals that STI is still burdened by the virus and fear or more cash (from Budget) burning through. The obvious state of the economy is not comforting investors who have stayed throughout the past few months especially with the index components. However, the obvious downsides of STI are also decreasing as Singapore has been preparing for an upturn. The 9 days MA crossed the 20 days MA in the past week and it is good news if STI jumps on Monday at the opening.

STI – Updated Weekly Chart

STI weekly chart shows that the sideway consolidation continues after a short trend reversal signal between 9 and 20 MA. It might be a false alarm as mentioned in the analysis of the daily chart and it will be confirmed on Monday when the market opens.

Special Feature – OCBC Bank (O39)

OCBC bank has been fighting for the second-best pick for bank stocks in STI, the first place being DBS. OCBC has been negatively implicated ever since the trade war which shook the world, which led to a rally for UOB (Smaller focus in China) which seemed to overpower DBS for more than 6 months in 2019. The tables are about to turn as UOB’s performance has been affected by the pandemic more severely than their counterparts.

Author’s Call as of 23rd August 2020

• STI was disappointing for another week after Monday’s announcement which was funded by delays for other development projects in SG
• There is hardly any news on aggressive moves made to boost investor’s interest in SG on the news for most sectors
• SG’s aviation sector benefits from recent announcement to allow general travel to NZ and Brunei
• The overall market is not showing much downside risks and more good news might be on the horizon in the coming weeks

Author’s Call as of 16th August 2020

• STI closed above support levels on both daily and weekly charts and is edging upwards
• Next (5th) stimulus package to be announced on Monday supports recovery of companies
• Major components of STI has reported their 1H performance and are all within reasonable expectations
• Look out for bullish price actions in the coming week to seek if next resistance level to take profit if your position is for a short term trade