On 31/Jan, Singapore shares ended higher after European Union nations endorsed a treaty to enforce fiscal discipline.

STI ended higher at 2906.69 (0.6%) with HIGH VOL of 3.16 billion shares traded compared with 1.50 billion shares Monday. In the broader market, gainers outnumbered losers 355 to 102. Today there are heavy buying pressure as investors buy on the good news from Europe.

Headline in STI

After market close

SMRT Corp. (S53.SG) 3Q net profit fell 13.9% to S$37 million compared with S$43 million a year earlier due to higher energy costs and higher operating costs.

Mapletree Commercial Trust (N2IU.SG) 3Q distribution per unit was 1.428 Singapore cents, beating its own forecast of 1.237 Singapore cents mainly due to higher-than-expected revenue from its VivoCity property.

SIA Engineering Co 3Q net profit rose 5.3 per cent to year-on-year to S$63.5 million on the back of higher revenue from its fleet management programme and an increase in airframe and component overhaul work.

Technical Analysis on STI

Immediate Resistance of STI: 2906

Immediate Support of STI: 2856

MY sentiment on STI: Today STI re-test the critical resistance at 2906 with high volume today but failed to break through. The main concern still remains on resistance at 2906/ 2936 and we do not feel that these resistance can be broken any time soon. We maintain on view to sell on rally due to overbought market.

On Monday, STX OSV broke the support at $1.41 and closed at $1.40 with LOW volume of 4.86 million shares traded.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body).  The engulfing bearish pattern is bearish during an uptrend; it then signifies that the momentum may be shifting from the bulls to the bears.

Both RSI & MACD are bearish as RSI trend downwards.

Important Resistance of STX OSV: $1.41

Immediate Support of STX OSV: $1.33

Currently prices are supported by 20 days MA at $1.33

Today prices have broken the critical resistance turned support at $1.41 with low volume.

However there are still chances that prices can recover back since the selling pressure is relatively low.

Too late to buy now due to overbought market. But do watch for the resistance at $1.41 tomorrow and sell on any huge selling pressure.

On 30/Jan, Singapore shares ended lower over disappointing U.S. data on Friday.

STI ended higher at 2888.29 (1%) with HIGH VOL of 1.50 billion shares traded compared with 1.56 billion shares Friday. In the broader market, losers outnumbered gainers 255 to 169. Today STI undergo profit taking snapping a five session, 4.3% winning run.

Headline in STI

After market close

Neptune Orient Lines Ltd. (N03.SG) average revenue per 40-foot equivalent unit, or FEU, for the six weeks from Nov. 19, 2011 to Dec. 30, 2011 fell 14% to US$2,265 compared with US$2,647 a year earlier.

Olam International Ltd. (O32.SG) plan to buy a 75% equity stake in Russian Dairy Company LCC, or Rusmolco, for US$75 million and help the dairy farming company grow its business.

Singapore Post Limited (SingPost) 3Q net profit fell 5.2% to $41.56 million compared with $43.82 million a year ago.

Tiger Airways Holdings Ltd. (J7X.SG) 3Q net loss of S$17.4 million net loss compared with a net profit of S$22.5 million a year earlier due to a costly grounding of its fleet in Australia hurt revenue and fuel prices rose.

Technical Analysis on STI

Immediate Resistance of STI: 2906

Immediate Support of STI: 2856

MY sentiment on STI: Investors have began to took profit off the recent rally as STI fell off the support at 2906. As mentioned in the previous market outlook, the possibility of pullback is high and suggest to take profit if vested.

On Friday, Cosco trend sideway and closed at $1.18 with HIGH volume of 10.52 million shares traded.

A spinning top occurred (a spinning top is a candle with a small real body).  Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close).  During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Both RSI & MACD are bullish though RSI in overbought region.

Important Resistance of Cosco: $1.36

Immediate Support of Cosco: $1.125

Currently prices are resisted by 200 days MA at $1.36

On 25/Jan, prices broke the critical resistance at $1.125 with high volume and this affirms to the bullishness of the investors.

However for the past 2 trading sessions, prices seem to be having issues in climbing higher.

Too late to buy now as RSI already way overbought and do consider to take profit if $1.125 support breached.

In last week, STI gain 67 points from the opening of 2849 and close higher at 2916. A white candle sticks with little lower shadow affirms that investors have no hesitant in buying the stocks higher.

Key Economics Data report:

In the coming week, US will report January jobs on Friday. Data is likely to show lower job growth in January, with an increase of nonfarm payrolls of about 125,000 jobs.

Fed has also mentioned that there no current plans for a new QE program, but it could carry out another easing program if the economy runs into trouble. Investors believe that Fed would target the mortgage market, buying hundreds of billions of securities in an effort to keep interest rates low.

Technical Analysis on STI

STI index broke the critical resistance at 2906 and closed right at high for the 3^rd consecutive week which affirm the bullishness of market sentiment.

1) In weekly chart, a white candle sticks with little lower shadow affirms that investors are bullish on the earning report ahead.

2) The weekly trading volume drop due to market open for only 3 days in this week.

3) MACD and RSI indicators are bullish as RSI trend upwards.

4) STI is currently supported by the major support at 2906

5) The major resistance at 2936 is likely to stall STI.

Important resistance of STI: 2936 (Daily charts)

Immediate Support of STI: 2906 (Daily charts)

MY tactics: There has been a total of 4 consecutive week of white candle stick and this is a very bullish sentiment for the STI. However the resistance at 2936 is expected to be very strong and thus we would suggest to take profit if vested. Pullback is likely in next week.