(By Roger Tan, SIAS Research)
Though the STI started strong in the beginning of the week, profit taking pressure started to set in at the end of the week. Still, the STI was up 2.4 per cent despite lower volume due to the World Cup season. The S&P 500, on the other hand, closed 1.3 per cent higher for the week.
We believe that the STI will continue to strengthen as funds start to window dress for the mid‐year as we approach the end of June 10. There may therefore be an opportunity for investors to make some arbitrage profit during this period by either trading STI ETFs or “call” structured warrants on the STI.
As for individual stocks, we have noticed some interest in OSIM and the interest has caught our attention. We suggest investors take a look at this counter.
Week Review (14 June to 18 June)
The markets continued their recovery early last week and the recovery tapered off as the markets fall into the World Cup lull. We saw that the lull started to kick in midweek and volatil- ity in the market started to fade. Near the end of the week, we saw a little consolidation that might continue into this week.
Weekly Forecast (21 June to 25 June)
We should be seeing slight consolidation in the markets as traders start to take profit for the World Cup. The last push seemed to be done last week and we can expect the lull to kick in fully this week.
The market will not be moving much, and with Stochastics being at a high, and MACD showing decreasing strength, we can expect to see some consolidation during this week.
