Hence, any further rebound would remain underpinned by short-term indicators which are less powerful than long-term indicators such as annual momentum and two-year momentum. Both these indicators have flattened but remain beneath their equilibrium lines.
The Straits Times Index rose 36 points week-on-week to 2,581, supported by an upturn in short-term stochastics. There has also been a rebound in 21-day RSI which rose from 36 at the start of Aug to a high of 50, before ending at 48 on Aug 14. The most encouraging sign was the glacial rise in volume during the week of Aug 11–14, albeit as the STI formed dojis rather than white candles.
Some further short-term upmoves could materialise as stochastics rises to the top end of its range. However, ADX — which had also moved up — has dipped. All this while, the DIs stayed negatively placed. The divergence in the short-term indicators was further amplified by their movement against quarterly momentum which continued to hover around its equilibrium line.
