SIA at good valuation, time to watch out? | Stock Review & Analysis | Singapore

Once a darling among the analysts during the last quarters economy recovery, the stock is battered with series of bad economic developments – Libya outbreak, Japan earthquake and nuclear scare. SIA has also announced the cancellation of some daily flights to Tokyo, Japan.

On technical front, SIA has staged a good recovery and bull run since May 2010 at $9.50. But since the last high at $18, SIA has corrected downwards after breakdown even past through key resistances of $14 (set in mid Nov 2010) and $13.50. Next key resistance at $12 set in last Sept 2010. Any recovery at present moment will be short term unless significant price breakouts above $14. Bullish divergences for STO and RSI should provide some price fall cushioning.

Business front, it should take at least 6 months for air route traffic to recover from the recent shock.

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