Sembcorp Industries Ltd (SCI SP), SBS Transit Ltd (SBUS SP)
🏗️ Sembcorp Industries Ltd (SCI SP) – Breaking Out of a Downtrend with Upside Potential
Recommendation: Accumulate (Technical Buy)
Target Price: S$5.25, S$5.55
Stop Loss: Below S$4.65
Date of Recommendation: 2nd September 2024
Broker: Maybank Research Pte Ltd
Investment Thesis: Sembcorp Industries Ltd has shown promising signs of a breakout from its downtrend, supported by high trading volumes. The stock’s price has recently surged past the 50-day Simple Moving Average (SMA), which is a strong indicator of more upside potential in the near term. However, for a confirmed breakout run, another white candle is necessary to validate this upward movement.
- Technical Breakout: Sembcorp has broken out of its downtrend channel with significant volume, signaling a potential shift in momentum towards a bullish trend. The stock has also surpassed the 50-day SMA, which typically indicates a strengthening upward trend.
- Momentum Indicators: Positive technical signals, including the rising MACD and a strong Relative Strength Index (RSI), support the bullish case for Sembcorp. The increased trading volume further reinforces the likelihood of sustained upward momentum.
Valuation and Financials:
Sembcorp Industries is currently trading within the range of S$4.70 to S$4.93, with an upside target price set at S$5.25 and S$5.55. The stock’s technical indicators suggest continued potential for gains, making it an attractive buy for those looking to capitalize on its recent breakout.
Share Price Catalysts:
- Sustained breakout above key resistance levels.
- Continued positive performance of technical indicators.
- Strong market sentiment and increasing investor interest.
🚍 SBS Transit Ltd (SBUS SP) – Cautious Outlook Amid Downtrend
Recommendation: Distribute (Technical Sell)
Target Price: S$2.24, S$2.11
Stop Loss: Above S$2.45
Date of Recommendation: 2nd September 2024
Broker: Maybank Research Pte Ltd
Investment Thesis: SBS Transit Ltd continues to be trapped in a downtrend channel, with recent attempts to challenge resistance levels failing to gain traction. The stock’s price remains below both the 30-day and 50-day SMAs, indicating that bearish sentiment still dominates.
- Bearish Momentum: SBS Transit has struggled to break out of its downtrend, with multiple resistance levels proving to be significant obstacles. The stock’s inability to surpass these resistance points suggests continued downward pressure.
- Technical Indicators: The candles are trending below the 30-day and 50-day SMAs, both of which are considered bearish signals. The stock’s current position suggests that sellers remain in control, and further declines may be on the horizon.
Valuation and Financials:
SBS Transit is currently trading within the range of S$2.36 to S$2.43, with downside targets set at S$2.24 and S$2.11. The stock’s weak technical indicators and persistent downtrend make it a sell for those looking to avoid further losses.
Share Price Catalysts:
- Failure to break above resistance levels, leading to further declines.
- Continued weakness in technical indicators.
- Negative market sentiment and declining investor interest.
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