SINGAPORE (March 27): In normal circumstances, resistance levels appear at previous highs and areas of congestion.
Levels of previous support — when broken — usually turn into resistance levels.
Hence, the Straits Times Index broke below the twice-tested the 2,528 to 2,623 range during the sharp selldown and this area is likely to provide resistance. Against this background, the rebound is likely to find resistance at 2,620.
The 21-day RSI which fell to a low of 13 is back at 37, still a relatively low level. Its resistance is at 50. This should tie in with the rebound high.
There is not much change in weekly long-term chart or the direction of annual momentum which are both showing a downward bias.
The March 23 low was 2,233 and the intra-day low was 2,208. These levels are now the new established supports.
