SINGAPORE: SINGTEL - NO SIGNS OF PRICE MOVING INTO A DIRECTION

The price of Singtel in the stock market fell 8.3% from $2.76 on the 29th of January to the current price of $2.53. The price of Singtel has been trading in a range between $2.30 and $2.80 since November 2008. In early 2008, the share price was trading between $3.60 to $4.00.

Technically, the price of Singtel is still down in the long term. Its long term 90-day moving average is still declining and the price is below it. It tested this average on the 29th of January but failed to stay above it. The short term averages has started to move sideways indicating a correction. Therefore Singtel’s share price is currently in a down trend correction. The 90-day average price is currently at $2.60.

The strength of bulls and bears in Singtel is almost equal. The Relative Strength Index (RSI) indicator reading has been around the mid-level of 50 since December 2008. The weekly MACD Histogram has shown sign of weakness in the current momentum. The Histogram has started to decline after 14 weeks of increase. Volume remains firm in the past weeks with about 23 million shares traded daily. However, it is relatively lower than in early 2008 where the average shares traded daily was at about 30 million shares.

With weak momentum and no signs of price moving into a direction, trading within the support and resistance levels is preferable. Since the price is currently in the middle of the 3 months support and resistance trading range and the momentum is weak, the price is expected to test the support level which is at $2.30. If the support of $2.30 is broken, we may see price of Singtel decline further to test the next support level at $2.00. If it holds above $2.30, then we may expect price to rebound to test the resistance level at $2.70.


Daily ST ENGG chart as at 6 February 2009 using NextVIEW Advisor. Click on chart for larger view.

****

Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.