Singapore starts off with a positive week

The Straits Times Index (STI) started the new week on a positive note, although it remains trapped within the familiar 3300-3350 band.

SGX building in Singapore
Source: Bloomberg

There is talk that the recent correction has made the local equity market more attractive due to better valuation and yield.

However, MACD indicators are also showing mixed sentiments, depending on the timeframe you are looking at. If you look at the daily period using MACD (12,26,9), the MACD line is crossing above the signal line, which could suggest a buy signal.

Using a weekly period, the MACD oscillator shows a bearish signal where the MACD line is not only below the signal line, but cuts below the zero line.

This is a stronger sell signal. Currently, on the weekly chart, the STI is trading sideways within the 50-day and 100-day moving averages.  

Much of the rally in the STI was driven by strong gains in Singtel. The telecom counter rose over 1% to a one-month high of SGD 4.33, probably lifted by news of a joint venture with an Indonesian state-run telecom firm, Telkom, to work on information and technology applications in Singapore.

The jump in Singtel’s share prices extended the recent rebound, which started at the beginning of June. A close above the 50-day moving average of SGD 4.29 may trigger a stronger bullish momentum.

European stocks optimistic about Greek talks

European markets were off on a bang on Monday, with the DAX and CAC surging over 3% as of 9.30am London time. So far, we have hear constructive news about the new Greek proposal. Markets were encouraged by the welcome given to a new proposal from Greek Prime Minister Tsipras.

 European Commission said that the new offer is a good basis for progress, which could unlock a protracted impasse in bailout talks. The barrage of headline risk will continue to influence European trade ahead of the emergency meeting.

Interestingly, EUR/USD weakened ahead of the EU emergency meeting. However, prices remained supported above 1.13. I wrote about the euro resilience amid the Greek crisis, and why the market is not pricing in a catastrophe for EUR. The traders are hedging their EUR positions in the options markets.

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