Market Overview

Singapore

Straits Times Index (STI) is a market capitalization weighted index that tracks the performance of the top 30 companies listed on SGX.

Largely due to higher interest rate environment and global tensions, higher costs has been recorded on most companies earning, driving margins down.

Most companies management has also provided guidance that in the current quarter earnings are likely to take a hit again due to higher costs.

Historical trends have indicated that the market is likely to see a slow down in volume toward the end of the year, signaling that there could be a difficulty for the STI to inch out gains this year.

The STI continues to trade under the 3,150 key resistance. A failed attempt to break above the resistance at the start of Nov, as we saw sellers regain control, pushing prices back toward the 3,000 - 3,050 support area.

Hot News (Click to read):

• Singapore’s Housing Rally is set to end, Morgan Stanley says (The Edge Singapore)

• Singapore Stocks lift after cooler US inflation sparks regional rally (The Straits Times)

United States

Dow Jones Industrial Average (DJIA) tracks the daily price movements of 30 large, public-owned blue-chip American companies.

DJIA is currently trading above the 34,500 key level, which is now a support. Observing that the 20d MA has started to point up, as long as the prices continue to push higher toward the 35,500 level, we could potentially see 20d MA crossing above 100d and 200d MA, confirming an uptrend reversal.

S&P 500 Index is a market-capitalization weighted index of the 500 leading companies in the US which is widely considered as one of the best gauge of the US economy.

The S&P 500 has breached 4,400 level with a huge gap up. Market could be attempting to test the 4,600 key resistance where selling pressure could be return once again.

Cooler inflation data has sent a sense of relief throughout the market, where stocks are trading higher. Excluding volatile food and energy prices, the core CPI rose 0.2% and 4.0%, against the forecast of 0.3% and 4.1%. The annual rate was the smallest increase since September 2021.

Following the report, traders took any potential Fed rate hikes almost completely off the table, according to CME Group data.

Hot News (Click to read):

• The Market thinks the Fed is going to start cutting rates aggressively. Investors could be in for a letdown. (CNBC)

• Consumer spending fell in October, according to New CNBC/NRF Retail Monitor tracking card transactions (CNBC)

Singapore Stocks Spotlight

OCBC BANK (O39.SI)
Target Price: S$13.40

About OCBC Bank

• OCBC Bank offers a comprehensive range of banking services and financial solutions in consumer banking, business banking, international banking, global treasury and investment management

• Currently has assets of S$151b and a network of over 370 branches and representative offices in 15 countries and territories

Fundamental

• Net interest margin raised by management after 21% jump in Q3 net profits

• Southeast Asia's second-largest lender by assets, projected a net interest margin at 2.25% for 2023

• The bank expects to see Return on Equity (ROE) above 14% but loan growth in the single digit range

Technical

• Price found temporary support around 12.60, where we saw a hammer and multiple long lower shadows at the end of Oct

• Immediate psychological resistance is around 13.20 where sellers have returned

• Gentle upward sloping channel support trend line still valid since Jul 2022

• Potential strength towards 13.40 if price is able to break and hold above resistance

GLD US$ (O87.SI)
Target Price: US$190

About GLD US$

• ETF managed and marketed by State StreetGlobal Advisors

• Designed to initially track the price of a tenth of a troy ounce

  of gold

Fundamental

• Gold provides a natural hedge against inflation and is regarded as a safe-haven investment during downturns in the economy

• Trading GLD shares in the secondary market or via a Trust may be lower than the costs associated with buying, storing and insuring physical gold in a traditional allocated gold bullion account

• Inverse relationship between gold prices and US dollar

Technical

• Price looks to be testing the immediate support around 182, with key resistance around 190, where we saw a Shooting Star pattern in Apr & May 23

• 20d MA has surged over 100d and 200d MA indicating short-term strength

• May see some selling pressure returning around 186 level first, as we saw a Bearish Harami pattern occurred on 30 - 31 Oct

ST ENGINEERING (S63.SI)
Target Price: S$3.90

About ST Engineering

• Singapore Technologies Engineering Ltd provides solutions and services in the aerospace, electronics, land systems, and marine sectors

• Operates through the following business segments: Commercial Aerospace, Urban Solutions and Satcom and Defense and Public Security

Fundamental

• 9% increase in group revenue 3Q 2023 on YoY basis, to S$2.4b

• Commercial aerospace segment seen 30% increase in revenue

• 20% increase in order books to S$27.5b, with S$2.5b expected to be delivered in the final months of 2023

Technical

• Price looks to be testing the upward-sloping channel support line over the past week

• Immediate support level is around 3.80 and resistance is around 3.90

• A Bearish Harami pattern occurred on 3-6 Nov, giving further weight to the 3.90 resistance level

• May potentially see a range trading between 3.80 -3.90 as seen back in Aug - Oct 23

FOOD EMPIRE (F03.SI)
Target Price: S$1.30

About Food Empire Holdings Ltd

• Food Empire Holdings Ltd. operates as a global branding and manufacturing company in the food and beverage sector. The firm's products include instant beverage products, frozen convenience food and snack food

• Proprietary brands are MacCoffee, Café PHO, Petrovskaya Sloboda, Klassno, Kracks and OrienBites

Fundamental

• Net profit after tax of S$15.7m in Q3, a decline of 30.6% from S$22.6m in Q3 2022

• Drop in profit to the absence of a one-off gain of S$15m from the disposal of a non-core asset recorded in the year-ago quarter

• Revenue for the three months ended Sept. 30 slipped 1.6% YoY to S$106.8m , due to the depreciation of the Russian currency

Technical

• Overall long term uptrend is still intact as price is trading above all 3 MAs. Furthermore, 100d and 200dMA are still heading upwards

• Support remains at around 1.05 and resistance is around 1.18

• Multiple tweezer tops pattern appeared near the resistance level over the past months

• If price is able to breach and hold above resistance, may see potential strength towards 1.30

United States Stocks Spotlight

INTEL CORP (INTC.NQ)
Target Price: US$48.00

About Intel Corp

• Intel Corporation is an American multinational corporation and technology company

• One of the world's largest semiconductor chip manufacturer by revenue

• Supplying microprocessors for computer system manufacturers such as Acer, Lenovo, HP, and Dell

Fundamental

• Global semiconductor leader, dominating PC and server processor markets

• Market dominance provides Intel with economies of scale, innovation opportunities, and growth potential

• Strong position in AI semiconductor market with a diverse portfolio and solid financial backing for growth and innovation

• Solid balance sheet, providing financial flexibility to pursue growth opportunities and invest in new areas

Technical

• Price has broke the 40 level which was our target mentioned in our Oct newsletter. This level is the new support

• Immediate resistance around 44 where some selling may return first. Potential upside target towards 48 if support holds

• Overall long term uptrend is still intact with all 3 MA pointing upwards & price forming higher lows

ALPHABET INC (GOOGL.NQ)
Target Price: US$152.00

About Alphabet Inc.

• American multinational technology company focusing on artificial intelligence, online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, and consumer electronics

Fundamental

• Initially perceived as lagging in artificial intelligence (AI),but it has since demonstrated its leadership in AI

• The company's capabilities in AI have become more evident, dispelling concerns about its position in this field

• Expected to see growth in its Cloud segment, which has become a profit driver for the company. AI is also a significant focus, with a robust product development pipeline in this area

• Alphabet reported revenue growth of 11%, returning to double digits for the first time in more than a year. Net income rose to US$19.7b, or US$1.55 per share, fromUS$13.9b, or US$1.06 per share

Technical

• Long term uptrend is still intact, however there is some short-term weakness as 20d MA is attempting to break below 100d MA

• Price found a new temporary support around 128

• Resistance around 140 still remains

• A Dark Cloud Cover pattern appeared on 11 - 12 Oct near the 140 resistance, adding further importance to this level

CELSIUS HOLDINGS (CELH.NQ)
Target Price: US$45.00

About Celsius Holdings

• Celsius Holdings, Inc. engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements

Fundamental

• Q3 results that exceeded expectations, with record revenue and profits driven by impressive growth in both North America and international markets

• Partnership with PepsiCo has allowed it to outperform its competitors and dominate the energy drink category

• Semi-staple business which is still in its growth stage

Technical

• Uptrend started forming in May 23 when 20d MA crossed above both longer term MA. Seeing some short-term weakness as 20d MA is whipsawing against 100d MA since Oct, however overall long term uptrend is still intact

• Current key level to note is around 50 where we see a tweezer bottom pattern occurred on 31 Oct - 1 Nov

• Immediate resistance is around 60 - 62 where we may see some sellers return

• If price is able to breach and hold above 62, may see further strength towards 67 - 68. Otherwise, potential range bound trading could occur towards 45 level

SPDR SELECT SECTOR FUND - TECHNOLOGY (XLK)
Target Price: US$195.00

About XLK

• A SPDR Fund seeks to provide investment results that (before expenses) correspond generally to the price and yield performance of the Technology Select Sector Index

• Effective representation of the technology sector of the S&P 500 Index

Fundamental

• XLK has outperformed other sectors and has the potential for capital appreciation due to the rise of AI and productivity gains

• XLK's price-to-book multiple of 7.21x is much lower than its top five holdings which account for about 55% of the ETF's overall weight

Technical

• Long term uptrend remains intact with 100d and200d MA heading up. 20d MA is attempting to break above 100d MA

• Price broke above 180-181, which became the immediate support level. Next psychological resistance level around 195 - 196

• Price broke above the downward sloping channel resistance line formed by connecting the highs from Jul - Oct 23, indicating potential short term trend reversal to the upside

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