SG SESSION (Establishment of Short Term Uptrend Channel)
The Straits Times Index (STI) rallied +2.8% (+77.94 points) during the week, maintaining its rally within the uptrend channel established since February. However, the existing rally has been met with bearish divergence against its MACD Histogram, signifying potential weakness in this rally.
Although STI has broke out of its 2,900 resistance, the next resistance level is just within sight at 2,940. The support to watch for the intact of this uptrending momentum is 2,760 immediate support.
US SESSION (Double Bottom Formation Breakout In Play)
The S&P500 rallied a further +1.4% (+27.4 points) to continue its 5th consecutive week of rally. As highlighted last week, S&P successful breakup of a trend reversal Double Bottom Formation (Bullish) is currently still in works. At current junction, S&P500 is a Rising Wedge (Bearish Chart Pattern) formation, along with bearish divergence still persisting in MACD Histogram.
The levels to watch for the week is 2,117 immediate major horizontal resistance level. The immediate major support zone to watch is 1,960 level for the short term uptrending momentum to remain intact.
5 things to watch on the economic calendar this week
1. U.S. fourth quarter GDP – third estimate (Friday)
The data is expected to confirm that the economy expanded by 1.0% in the final three months of last year, unchanged from a preliminary estimate and slowing from growth of 2.0% in the third quarter.
2. U.S. durable goods orders for February (Thursday)
The report is expected to show that orders for durable goods slumped 2.8% last month, following a gain of 4.7% in January, while core orders are forecast to inch down 0.2% after rising 1.7% a month earlier.
3. U.S. February home sales data (Monday)
The National Association of Realtors is to release data on existing home sales for February on Monday, amid forecasts for a decline of 2.2% to 5.34 million, following a gain of 0.4% a month earlier.
On Wednesday, the Commerce Department is to publish a report on new home sales for February at 10:00AM ET. The data is expected to show a gain of 3.1% to 510,000, following a drop of 9.2% in January.
4. U.K. inflation & retail sales data (Tuesday)
Analysts expect consumer prices to inch up 0.4%, following a 0.3% gain a month earlier.
On Thursday, the ONS will produce a report on February retail sales at 9:30GMT, which will offer further clues on the strength of the economy and the timing of a rate hike by the Bank of England.
Expectations for a rate hike by the BOE have been recently pushed back to early-2017 due uncertainty over a June referendum on whether or not Britain should stay in the European Union.