In the meantime, the STI is likely to remain rangebound with 2,970 as the low point, and resistance appearing at the breakdown level of 3,140 to 3,150.
Despite short term oversold readings for the Straits Times Index, it closed at 3,061 on October 27, down 15 points week-on-week. The immense selling pressure of mid-October appears to have abated. Although volume is relatively high compared to levels seen in September, volume has also eased week-on-week as the STI drifted lower.
While main support remains at 2,970, the index could attempt the beginnings of a base formation around 3,051, the low on October 23. Short term RSI has yet to form a positive divergence, and quarterly momentum is some way from bottoming. On the other hand, the negative reading of around 38 by ADX against a background of negatively placed DIs suggest that the negativity around this indicator may have peaked.
