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
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.
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.
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%.
The portfolio suffered no realised losses in October.
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: