The current bear market in the Singapore bourse is now in its eleventh month.
The decline has shown the market’s willingness to accord a multiple on earnings anywhere from 5x to 25x or more as confidence wanes. This is proof again that it is greed and fear that drive stock prices.
Underscoring this, the FSSTI gapped down twice last week as it breached below prior supports and headed to a low of 2554. There is a strong chance that the index could firm up in the early part of the week on news of planned rescue of mortgage lenders, Freddie Mac and Fannie Mae. However, any rallies are seen to be bear rallies, that would at best extend by 2-3 days. The index could head up to cover the latest gap at 2626 or at best towards 2680.
We recommend adding short positions on banking stocks, Noble and Olam as the index rises to these levels. On wave count, the index is seen to be in wave 3 of C, which should bring it towards 2430 or so.
No comments:
Post a Comment