Technical Analysis: The Phillip 20 – October Monthly Review November 6, 2017

  • New Entries: Hi-P, OUE and Chasen
  • Take Profit: Hi-P
  • Total return since May to October is +8.3% with a realised gain of 0.89% in October
  • STI breaking above the July 2017 high of 3354 points suggests a strengthening bullish momentum

October came and went with a bang as the Straits Times Index regained all the loses from the prior two months. STI advanced 4.79% in October, and the monthly close above the July high of 3354 is a bullish sign.

As rising tide lifts all boats, the “Phillip 20 Portfolio” also benefited from the bullish momentum. The relative performance of the “Phillip 20 Portfolio” in October was +4.85%.

STI Weekly Chart – Broke a new 52-week high

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Source: Bloomberg, PSR

Red line = 20 period moving average, Blue line = 60 period moving average, Green line = 200 period moving average

In the September monthly review report, we emphasised the importance of the 3189 support area. Since then, the 3189 support area held up steadily and succeeded in reversing the STI back into the uptrend. On the weekly timeframe, the 3189 support area also coincided with the 20 week moving average making that area a major pivot point. The subsequent bullish break above the 20 week moving average and downtrend line in the week ended 6 October kick-started the current up leg.

Moreover, with October closing above the 3354 July high, the STI has successfully established another new 52-week high. Thus confirming the progress of the uptrend since February 2016 with the formation of the series of higher highs and higher lows.

With the ongoing bullish momentum, expect the STI to head higher next to test the 3457 resistance area followed by 3549.

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New Entries

Three new trades entered into the portfolio, namely, Hi-P, OUE and Chasen in October while Golden Agri-Res is still pending to be triggered at 0.400.

Winners

However, in the same month, we have also decided to take profit on Hi-P due to the bearish price action on 17 October. Hi-P yielded the portfolio an equal-weighted return of 0.89%.

Losers

The portfolio suffered no realised losses in October.

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Watchlist

After a major reshuffling of the portfolio, there are currently 19 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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