SINGAPORE (Sept 22): Here are some charts this week for our technical analysis.
Straits Times Index (daily)
A short term rebound is underway for the Straits Times Index (3,220), underpinned by the upturn in short term stochastics. This indicator has turned up smartly after wallowing around the bottom of its range for two weeks. ADX is rising, and the DIs remain negatively placed. These are positive signs.
The index rebounded 11 points during the week. Despite this, it remains below its 100-day moving average, currently at 3,253. If the rebound picks up steam, the index should be able to regain its breached 100-day moving average. At present, volume levels remain lacklustre. Volume goes with the trend. In an uptrend, volume rises, and in a downtrend volume rises. When volume falls as prices rise, the main trend isn’t an uptrend.
Annual momentum, which had displayed negative divergences with the STI, continues to ease. This could turn out to be a negative signal. Support was established at 3,200-3,209 a week ago. The STI is likely to fluctuate between 3,200 and 3,253. An upward break would lead to an anemic rebound. Holding above support at 3,200 is crucial as a breakdown indicates a target of 3,050.
Top volume stock
Rowsley (13.3 cents) stay sceptical
This somewhat speculative counter is attempting to form an uptrend. Prices have managed to hold above the 50-, 100-, and 200-day moving averages which have in turn formed positive crosses with each other.
On Sept 12, the 50 and 200-day moving averages formed a positive cross. The ultimate golden cross between the 100- and 200-day moving averages is likely to materialise next month. Still, skepticism is warranted as there is a very clear negative divergence caused by a rising price trend and contracting volume. The counter could make token gains in the coming week, with the upside capped at 15.6 cents. Support has been established at 12.4 cents, a level that looks like the top of a minor base formation.
