Jul[1] - Trend Overview (Post-BREXIT)

By last trading day, global market has fully recovered from its plummet upon BREXT voting results. All these happened at the end of 1H2016. Let's review the performance of STI and few of its constituents in the past 6 month.

In early 2016, STI experienced one of its most horrible month. Crude oil was trading at its 10 years low. "Risk off" mood was overwhelming global markets. While most retail investors were shaking head, market covered its lost ground on March. Subsequently downturn happened on May ("traditional SELLING month") as well as June (BREXIT). However, STI refused to retreat further from 2700, which has since become strong support. 

Banks used to be leading indicator of market sentiments towards future economy. Upon heavy sell down on 2H2015, banks has been mostly moving in side way. Interestingly, DBS yet under its book value. Although 16 seems to be strong resistance, current price movement is pretty stable. Shall 16 to be broken, the oversold window might come to end quickly (resistance changes to support). For OCBC, 4% dividend yield could be gaining enough interest meanwhile.

Crude oil production from Non-OPEC has been shrinking. OPEC has also indicated willingness for freeze production talk shall oil price drop again. Such factors could signal a balanced oil price as in current range (USD46-51). Keppel is under its net tangible asset price now. Current price could have absorbed most fear factor from oil glut.

SGX proved to be a range bound counter again. Benefited from its business nature, its earning used to be consistent throughout bull bear market. 7.3 served to be strong support.

Weeks before BREXIT, market were swinging wildly based on survey results. Similar situation could happen on the weeks leading to US election on November. As STI has been hovering near to its historical low valuation, downside room could be limited shall next market sell down happen. Above charts showed the resilience of STI. BREXIT incident proved that market might not be panic too long over non-surprising event. Volatility has become a norm. Therefore, retail investor shall embrace volatility and continue hunting value.