SINGAPORE (Nov 16): The Straits Times Index peaked temporarily at 3,285, before retreating. At its current level of 3,238, the index has stayed above the 200-day moving average at 3,227 and the 100-day moving average at 3,208.
Chart 1: STI with moving averages and momentum
Quarterly momentum is intact and in rising mode. The 50-day moving average continues its ascend. These indicators suggest that the main upswing is probably intact and the retreat should be temporary.
Short term indicators indicate that the index is in corrective mode. Short term stochastics is turning down from the top end of its range.
Chart 2: Short term indicators
The 21-day RSI has also turned down after reaching the top end of its range. In the meantime, +DI is falling, -DI is rising, and ADX is easing in mid-range. This suggests that while the STI is likely to ease, the decline should be modest.
Any retreat is likely to meet with support at 3,225 to 3,226 initially, and at 3,208 subsequently.
Ascendas REIT could continue to ease
Prices are testing the still rising 200-day moving average at $2.86. Since volume picked up during the corrective phase which started on Nov 4, prices may continue to weaken over some weeks. A break below $2.86 would cause prices to move towards $2.77 or so, with more substantial support appearing at $2.63. Quarterly momentum is weak. Short term indicators would be sufficiently oversold to trigger a bounce only later in the week. Any rebound during this period is likely to be temporary with resistance appearing at $2.97.
