A sustained recovery by the index is unlikely and it may only materialise during the northern hemisphere’s summer months when there is sometimes a traditional summer rally.
The banks played a large part in the STI’s resilience. Among them DBS Group Holdings remains the most resilient. It fell to $28.63 before rebounding. A more substantial support appears at $26.90.
Oversea-Chinese Banking Corp fell to $11.56 before rebounding. This level should be viewed as a preliminary support. Similarly, United Overseas Bank’s intraday low of $24.95 on May 17 represents initial support.
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Singapore Airlines, which peaked at $5.70 in April, and fell to a low of $4.50 on May 18, is likely to find support at the $4.08–$4.18 range. Its quarterly momentum is falling but may encounter support at its equilibrium line.
Sembcorp Marine is transitioning away from a rig builder focused on oil to a greener company. During its 1QFY2021 ended March business updates, the company highlighted a number of contracts in the renewable space, including a $1.12 billion contract for an offshore wind farm in the North Sea. Cash flow from renewables has yet to be reflected in the share price.
Technically, SembMarine made a minor peak at 22 cents on April 28 and retreated. Support for the retreat should have appeared at 18 cents. SembMarine stock made a low of 17.9 cents before rebounding. The 50- day moving average at 18.5 cents is likely to act as a support line. Meanwhile, the 100- and 200- day moving averages have made a positive cross. Stochastics has bottomed at the bottom end of its range and the 21-day RSI has turned up. ADX continues to fall. As a result, the rebound is likely to meet with resistance at 22 cents. The original breakout from 15.5 cents indicated an upside of 27 cents and this remains valid.
See also: STI to continue correction; here are the supports for Sembcorp, DBS and STE
Sembcorp Industries is also transitioning to a greener company, as evidenced by the construction of its floating solar farm in Tengeh Reservoir. The solar power generated by this farm will meet the day-to-day energy needs for operations at PUB’s five local waterworks.
Technically, Sembcorp’s stock fell to a low of $1.91 on May 14, marginally below its still-rising 50-day moving average which is currently at $1.95, and rebounded. Stochastics is at the bottom of its range and quarterly momentum has rebounded off its own moving average. These underpinnings should support a further rebound from current levels. Resistance remains at $2.21. A successful break above this level provides the impetus to test $2.52.
