Weekly Updates 29/1/24 –2/2/24 January 29, 2024
This weekly update is designed to help you stay informed and relate economic and company earnings to potentially value-add your CFD (Contract For Difference) trading via hedging (risk reducing). This article should be used for educational purposes only and not as financial advice. We urge all traders to carry out your own due diligence before submitting trades.
Recap for last week (22 Jan 2024 – 26 Jan 2024)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s market movement revolved around 50 China state-owned companies issuing plans to buy back shares and attempt to improve investor confidence in the China & Hong Kong stock market. Furthermore, Alibaba founder Jack Ma who was quiet for the recent quarters came out to purchase Alibaba shares to improve market sentiment on Alibaba and China companies in general. Sending Hang Seng Index up 3.93% for the week.
Updates for the week (29 Jan 2024 – 02 Feb 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on employment data, FOMC rate decision from the US and manufacturing data from both the US and China. Market participants need to be wary of comments from the US federal reserve regarding the US economy, US employment and plans for future US interest rates. As it will introduce higher volatility in the stock markets if the US Fed has a more hawkish stance than what investors expect. Market participants also need to pay attention to China manufacturing data as it contributes 27% to China’s GDP and pays an important role in China’s economy.
This week’s corporate earnings focuses on 5 out of the 7 magnificent seven stocks (Microsoft, Alphabet, Apple, Amazon and Meta), ExxonMobil and REITs in Singapore. Big tech earnings are a key indicator of the strength of the US economy. Sets the sentiment and expectation for smaller companies who are yet to release earnings. Furthermore, with the magnificent seven stocks taking up ~27% of the S&P500, their earnings also has huge influence over the index.
If you hold equity positions in these stocks, you can hedge your positions using CFDs to mitigate the risk of disappointing earnings releases.
For those looking to speculate or capitalize on the increased volatility, CFDs provide leverage and ease of going long and short across a broad range of products available.
USD/JPY on Upward Trend after Rejection from Support Level – by Jeraldine Tan
Key Entry Price Pivot(s)
- 148.8
Recommended Trade
- Long at 148.8
- Stop Loss around 146.3 (250 pips)
- Take Profit around 151.8 (300 pips)
Alternative Case
- Short at 146.3
- Stop Loss around 148.8 (250 pips)
- Take Profit around 141.8 (450 pips)
Remarks
- USD/JPY was rejected from the lows finding support around 141 zone and continued to rally. Price has rallied above the moving averages and found some support in 10EMA.
- With the current upward momentum, the previous high around the 151.9 level could be tested again.
- Hence we recommend a trade to go long USD/JPY on a break above most recent high around 148.8 with take profit level around 151.8, and stoploss around 146.3.
- Alternative case is presented above for traders who remain bearish on USD/JPY to structure a short trade. The entry is to be placed below the most recent low with stoploss above the most recent high and take profit at the support level of ~141 zone.
If you have any feedback or questions, feel free to email us at samht@phillip.com.sg or onishathyeyn@phillip.com.sg or cfd@phillip.com.sg.
Disclaimer
This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs.
Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information. Investments are subject to investment risks.
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You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low.
Clients are advised to understand the nature and risks involved in margin trading. You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement.
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About the author
Sam Hei Tung (Dealing) and Onisha Thye (Dealing)
Sam graduated from National University of Singapore with a Master of Science in Finance. He personally manages his own investment portfolio and does equity and economic research in his free time. Sam believes that education and information is essential to making good financial decisions.
Onisha is a dealer at the CFD Dealing Desk. She graduated from Monash University with a double major in finance and econometrics. Her natural curiosity for finance is what drove her to be in this field as she is fascinated by all the possibilities and opportunities that are available to grow one’s wealth, either through trading or investment.
