The Straits Times Index appears similarly precarious. The local bellwether has been hovering around 3,575 since Sept 26, establishing this level as a support. Both short-term RSI and quarterly momentum are falling, suggesting that the STI is likely to experience a further consolidation. Support appears at the psychological 3,500 should 3,575 give way.
Inflationary fears abated on Oct 11 following the release of the producer price index, which was flat month-on-month and up 1.8% y-o-y, and below expectations. The more stubborn consumer price index, which ticked up a tad, had done some damage to yields. The 10-year US Treasury yield is at 4.1%, the highest level since July. The 2-year US Treasury Yield dipped below 4%, and the 30-year is at 4.4% as at Oct 11, suggesting that the yield curve remains normalised.
In North Asia, the Hang Seng Index rebounded on Oct 11. However, the Lion-OCBC Securities HS Tech ETF (HSTECH) ended the week of Oct 7-11 at 75.5 cents, near its low of the week. The high of 87.9 cents, attained on Oct 7, was the highest level the ETF had reached in just over two years. Short-term indicators suggest further consolidation ahead. The immediate support for HSTECH is at 75 cents. If short-term RSI continues to fall, this support may give way, with prices moving to nearer 72 cents.
