Technical Analysis: The Phillip 20 – August Monthly Review September 11, 2017

  • Take Profit: UMS, Hi-P and Metro
  • Stop Loss: MM2 Asia, HMI, UPP Holdings, Food Empire, Sheng Siong and Sunpower
  • Cumulative returns up to the month of August is 4.3% with a realised loss of – 1.26% in August
  • War scare in the Korean peninsula capping the general bullish momentum as uncertainty arises

Performance of the Straits Times Index (STI) was rather sluggish for the month of August 2017 as the STI fell -1.60%. Resulting in a negative month for the “Phillip 20 Portfolio” for all closed trades in August with -1.26% loss.

Since August, the bullish momentum in the STI appears to be capped by the confluence of 78.6% Fibonacci retracement level and 3356 resistance area, turning the STI into a correction. It is currently testing an important inflection point at the 20 week moving average where a reversal is expected if the uptrend was to continue.

STI Weekly Chart – Stuck in a correction with all eyes on 3195 support

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More importantly, the 3195 support area needs to hold up for the uptrend to remain strong. Keep in mind the weekly Relative Strength Index (RSI) had recently hit an extreme overbought region of 72 in July and a mean reversion is currently taking place suggesting a deeper correction. Heavy sell-off might surface once the STI breaks below the 3195 critical support area.

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Losers

The general weakness in the market affected the “Phillip 20 Portfolio” drastically as a handful of counters triggered their stop loss and turned them into a downtrend. The biggest loser of all was Sunpower with -27.88% loss since 30 March 2017.

Winners

Fortunately, the accumulated loss in August was cushioned by the big gains in Hi-P as we took profit at 1.410 with a 48.2% gain. We have also decided to take profit on both UMS and Metro with 4.19% gain and 6.79% gain respectively due to the bearish price action.

New Entries

Even with the sluggish market movement, we were able to identify a few buying opportunities with Golden Energy, Ellipsiz, Haw Par, Pan United, Moya Asia and Miyoshi, being added to the “Phillip 20 Portfolio.”

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Watchlist:

After a major reshuffling of the portfolio, there are currently 13 stocks within the “Phillip 20 Portfolio.” The following is the revised watch list that we are closely monitoring:

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About the author

Profile photo of Jeremy Ng

Jeremy Ng
Research Analyst
Phillip Securities Research Pte Ltd

Jeremy specialises in Technical Analysis and has 10 years of experience in studying price action. His areas of expertise include intermarket analysis on the equities, currencies, commodities and bonds market.

He is also a regular columnist on The Business Times - every Monday ChartPoint column.

He graduated with a Bachelor of Science in Banking and Finance from University of London.

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