The index may undergo further consolidation in the week of Dec 14-18. During that time, the 200-day moving average, currently at 2,589 and the 100-day moving average at 2,592 could turn decisively upwards. This would provide the trigger for the STI to attempt a test of 2,903, a level that is now viewed as a minor resistance. The two moving averages have already made a positive cross. A break above 2,903 provides the impetus for the index to test the next area of resistance at 3,110. Support is raised to 2,793.
Short term term technical indicators have turned down, as evidenced by declining stochastics. The 21-day RSI has also retreated after hitting a high of 76 on Nov 23, the day when the Straits Times Index tested an intra-day high of 2,903. The breakaway gap which starts at 2,891 continues to provide resistance.
