SINGAPORE (July 7): Here are some charts for our technical analysis this week:
STI daily (3,191)
A 65-point decline took the Straits TImes Index below a sideways range. The index was attempting to stabilise at the 3,254 area but broke below this level on Friday. There is now a positive divergence developing between quarterly momentm and the STI. Quarterly momentum had turned up from a very oversold low and may continue to do so.
STI’s short-term indicators are at lows
Short-term stochastics remains at the bottom of its range and is hinting at a potential upturn. The 21-day RSI stopped declining at 30, and but has yet to stage a reboud. ADX is at a one year high, an indication of a very overstretched level, and should turn down soon. Although a relief rally should materialise, prices remain weak. Still, short-term indicators are at extreme oversold levels, and they should spring upwards. At this stage, the downtrend remains intact. Resistance for the initial rebound appears at 3,338.
There is no change in the weekly chart which shows a gradual downturn by annual momentum, with its own weighted moving average turning down a well. The earlier breakdown below 3,338 indicated a measuring objective of 3,100 and this is almost at hand.
City Developments in the frontline of market selldown
Although the decline has yet to run its course, there could be a temporary bounce soon towards $9.80. The next major support appears at $9.
