Singapore Stock Review on Midas, Sapphire, Sunpower and Terratech

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The animal spirits seem to have finally descended on our Singapore market! Our STI is one of the best performing indices with a blistering 6.4% year to date return. Our FSTS ST Small Cap Index has returned 3.8% year to date. I have highlighted four charts which (I feel) deserve attention. Do note the caveats below.

 

Midas

 

Midas’ inverse head and shoulders pattern seems to be confirmed with the decisive upside break above its 200D exponential moving average (“EMA”) and neckline of around $0.230 – 0.240 with volume expansion (See Chart 1 below). With yesterday’s close of $0.255, this was the first time in 16 months which Midas can close higher than its 200D EMA for the 3rd consecutive day. 50D EMA is on the verge of forming a golden cross with 100D EMA at $0.230. Amid positively placed directional indicators (“DIs”), ADX closed at 29 on 8 Feb 2017. A sustained break above $0.240 points to an eventual technical target of $0.275. This remains valid. A sustained break below $0.230 negates the bullish chart setup.

 

Near term supports: $0.250 / 0.240 / 0.230

 

Near term resistances: $0.265 / 0.275 / 0.285

midas stock chart singapore

Chart 1: Midas’ inverse head and shoulder formation

 

Source: Chartnexus as of 8 Feb 17

 

Sapphire

 

Based on Chart 2 below, since 26 Oct 2016, Sapphire has been trading within a range of S$0.285 – 0.325. It seems to be on the verge of an upside breakout. It closed at $0.325 on 8 Feb 2017 with a total volume of 653K shares transacted. This transaction volume is larger than the average 30D volume of 204K shares. All the EMAs are moving higher with a good and constant degree of separation. ADX closed at 41 on 8 Feb 2017 amid positively placed DIs. Overall, the chart looks on an uptrend. A sustained break above / below $0.325 / $0.285 points to an eventual measured technical target of $0.365 / 0.245 respectively. As the trend is up, the odds of an upside breakout outweigh that of a downside breakdown.

 

Near term supports: $0.320 / 0.315 / 0.310

 

Near term resistances: $0.330 / 0.335 / 0.350

sapphire stock singapore

Chart 2: Sapphire on the verge of a likely breakout

 

Source: Chartnexus as of 8 Feb 17

 

Sunpower

 

Sunpower has been on a tear lately and has registered more than 55% gain within the last one month. It closed at $0.800 on 8 Feb 2017.  All the indicators are highly stretched. For example, RSI closed at 90 on 8 Feb 2017. ADX closed at an elevated (likely unsustainable) level of 67 on 8 Feb 2017. MACD also closed at all time high levels. These indicators seem to point to a euphoric rally which may not be sustained for long. For the past one year, Sunpower has surged 220% from $0.250 on 10 Feb 2016 to close at $0.800 on 8 Feb 2017.

 

Near term supports: $0.850 / 0.810 / 0.750

 

Near term resistances: $0.885 / 0.900 / 0.925

 

*Note: Sunpower’s RSI closed at 92 on 9 Feb 2017, the highest since listing.

Chart 3: Indicators are very overbought

sunpower stock chart

Source: Chartnexus as of 8 Feb 17

 

Terratech

 

Based on Chart 4 below, Terratech has been trading within $0.042 – 0.048 for the past four plus months. As of today, it has broken out of $0.048 with a strong volume of 42.6m shares traded. This is the highest volume since 10 Jun 2016. All the EMAs are rising with golden crosses. For example, 20D & 50D EMA have crossed above 200D EMA. OBV closed at the highest level since 10 Jun 2016 which signifies accumulation throughout the past four plus months. Amid positively placed DIs, ADX closed at 50, indicative of a trend. A sustained breakout above $0.048 points to an eventual measured technical target of around $0.054. A sustained break below $0.048 negates the bullish setup of the chart.

 

Near term supports: $0.048 / 0.045 / 0.044

 

Near term resistances: $0.053 – 0.055 / 0.057 / 0.061

 

Chart 4: Broke out of the trading range

terratech stock chart singapore

Source: Chartnexus as of 8 Feb 17

 

Before we get all excited about the above charts and their potential developments, readers should be aware of the following noteworthy points:

 

  1. Chart – end of day

 

At the point of doing this write-up on 9 Feb 2017, I only have the chart information as of 8 Feb 2017 data. This is because I am using end of data by Chartnexus.

 

  1. Technical chart reading on small to mid-cap may not be highly accurate at times

 

As most of you are probably aware, technical chart reading may not be very accurate as some of the small to mid-cap stocks are not highly liquid.

 

  1. Overbought levels can stay overbought for some time

 

As I have previously pointed out before, overbought levels can stay overbought for some time. Furthermore, there may be reasons known to the market but unknown to me, which may have caused the strong price rally for Sunpower.

 

Disclaimer

Please refer to the disclaimer HERE

Article by Ernest Lim