Even if the STI is likely to continue its decline, the breakout level of 3,350 should still provide support and the index could pause its decline at this level. However, indicators are weak, and a further fall appears likely.
Weakness in the Straits Times Index (STI) may persist given that local banks are experiencing profit-taking. The index continued to fall, and ended the week of July 30 - Aug 2 at 3,381, down 45 points week-on-week. At its current level, the STI has ended the week on the rising 50-day moving average at 3,380.
Since the chart pattern of the STI looks like a minor top, a breakdown would cause prices to fall towards 3,300, which takes the index below the breakout level at 3,350.
