Executive Summary

After weeks of consolidation, SGX (S68.SI) continues to hold firmly above the key $16.00 psychological support, a level that has repeatedly attracted buying. While the stock has yet to flash a fresh 1GT Bullish signal, prices have stabilised, and the tightening structure suggests a potential buildup beneath the surface. If SGX can clear the $17.65 resistance, it may reignite bullish momentum and open the path toward the $19.00 target, especially after consolidating for nearly two months.

This technical picture now sits against a backdrop of meaningful changes in Singapore’s equity market. The Monetary Authority of Singapore’s Equity Market Development Programme (EQDP), alongside upcoming ISSB-aligned sustainability reporting requirements, aims to deepen liquidity, improve transparency, and attract more long-term capital into the market. These reforms could indirectly boost interest in SGX as the key beneficiary of higher trading volumes and increased fund flows. With the long-term uptrend still intact and structural reforms underway, SGX may be quietly setting up for its next breakout move.

Singapore Exchange Ltd (SGX: S68) continues to be one of Singapore’s most stable blue-chip counters, supported by recurring revenue streams from equities trading, derivatives, and clearing services. 

As global market volatility normalizes and derivatives volumes extend their multi-year growth trend, SGX remains positioned as a defensive yet steadily compounding financial services play.

The broader trend structure for SGX remains firmly positive, while near term weakness is observed.

Prices continue to hold above both the 200-day moving average (blue line) and the 100-day moving average (red line), with both slopes still trending upward.

This confirms that SGX is still in a healthy long-term uptrend despite recent consolidation.

After peaking near $17.65, SGX experienced a mild pullback but has since stabilized above the $16.00 support. With the 20-day moving average (green line) flattening since the beginning of Nov, and currently slopping down, prices had since entered a consolidation phase.

A series of 1GT Bullish signals appeared earlier this year, flagging points where buyers re-entered the trend. While we do not have a fresh 1GT Bullish signal yet at this level, the psychological support could attract bargain hunters. 

If SGX can breach the $17.65 resistance, potentially signaling that bullish momentum is resuming, with the next upside target at the $19.00 resistance zone, potentially revealing a new 1GT Bullish signal after prices have consolidated within the current range since Mid Sep.

Based on the current structure, SGX offers two setups depending on your risk appetite:

A conservative approach would be to accumulate near the $16.00 - S$16.50 entry zone, after prices have stabilized, and potentially a new 1GT Bullish Signal appears, where long-term support remains intact and downside is limited. A protective stop can be placed just below the $16.00 psychological support.

For traders adopting a more aggressive approach, the cleaner trigger would be a confirmed breakout above $17.65, which would open the move toward the $19.00 target. If $19.00 breaks meaningfully, SGX may even attempt an extension beyond its existing highs.  

So, how does one take a position in SGX to ride the uptrend further with lower initial capital outlay?

Investors who wish to be exposed to potential upside moves in SGX shares can consider using a SGX call warrant to magnify the share price return using lesser capital and without the risk of margin calls, while those bearish can use a put warrant. There are currently three call warrants tracking SGX shares listed in the market and two SGX put warrants.

To find out how each of the call warrants will perform given Joey’s view on SGX shares, one can use the Warrant Selector.

Scenario 1: You are bullish on SGX shares if it breaks above $17.65 and decide to enter into a long position around say $17.70. If so, click on the call option after selecting “SGX” from the underlying drop down:

1) Enter under the “Last price” field the price at which you intend to take a bullish position on SGX shares, example: $17.70. The current prices of the warrants would in turn update to the bid price they would trade at should SGX trade there today:

2) Type in the intended exit level of $19.00 and, 3) increase the number of weeks to observe how the SGX call warrants would perform:

In this case, assuming all factors remain unchanged, If SGX took 4 weeks to increase 7.3% from $17.70 to $19.00, the first call warrant QABW (https://warrants.com.sg/tools/livematrix/QABW ) will gain around 4.5 times more – 32.5% from SGD 0.077 to SGD 0.102, while the second call warrant XKBW (https://warrants.com.sg/tools/livematrix/XKBW) will increase 5 times more i.e. +36.5% to SGD 0.116 and the last warrant YJ4W will increase more than 8 times that of SGX’s price change i.e. +61.2% to SGD 0.158.

Keep increasing the number of weeks and one would find that the percentage gains on all call warrants will erode. This is due to the effect of time decay – the costs of holding a warrant, where the longer one holds onto the warrant, the higher the holding costs.

In 11 weeks for example, the second warrant XKBW will be generating negative return of 4.74% while the third warrant YJ4W would have expired. An investor wanting a longer holding period would therefore consider the first warrant QABW.

Continue increasing the number of weeks and you’ll find that the maximum holding period for QABW would be only another 5 weeks (16 weeks from today), as it will generate only a 9.1% return then, not much more than SGX’s 7.3% return.

In short, the quicker SGX takes to get to Joey’s price target of $19.00 should it break above $17.65, the higher potential returns one can make via SGX call warrants.

Scenario 2: What about if one were bearish assuming SGX fails to break $17.65? If so, you can explore trading in a put warrant. Using the same Warrant Selector tool, scroll back to the top and select the put.

1) Under the “Last price” field, enter an entry level below the resistance of $17.65. For example, $17.50.
2) Thereafter, enter the target price where you expect the stock to be supported at e.g. the $16.50 support level mentioned by Joey.
3) Increase the number of holding weeks;

Put warrant 98BW will increase 16.9% from SGD 0.071 to SGD 0.083, three times more than SGX’s 5.7% share price fall. 

The maximum holding period for this put warrant is 6 weeks as the warrant would be unchanged by the 7^th week even if your view was correct due to time decay eroding all of the warrant’s gearing effect.

Investors may notice by now that leverage works both ways. Whilst warrants can be used to magnify one’s exposure and potential gains, losses can also be magnified when SGX shares fail to achieve the target exit price within the maximum holding period.

The sharing on how one can take a position using warrants has been contributed by Macquarie Warrants Singapore who is the issuer of these warrants listed on SGX.

About the Author - Joey Choy

Joey is Singapore’s renowned mentor on how to make an income by trading the stock market, an author and one of the most-watched, quoted and followed stock trading trainers in Singapore. Over the years, he has conducted numerous full house seminars, enriching thousands to trade more profitably. 

Joey’s come back story from a S$740k debt has been featured in the Business Times and inspired thousands in Singapore. In less than 3 years, he is highly regarded as one of the Top Tier Remisiers (Stock Brokers) and Traders, bagging numerous yearly awards like Top Trading Representative and Top CFD Achiever every year from 2014 to 2023 in Phillip Securities.

More about Joey here

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