SINGAPORE (Oct 6): Here are some charts this week for our technical analysis.
Straits Times Index (daily)
The Straits Times Index (3,292) gained 72 points or 2.2% during the week. There is still room to rise as short term indicators are at moderate levels having turned up only last week. Stochastics is in mid-range. The 21-day RSI has just moved above its equilibrium line. ADX is at a moderate 20 just as the positively placed DIs are drawing apart. All these indicators suggest that the STI has more upside. Interestingly, the index has regained the 50- and 100-day moving averages at 3,264 and 3,253. This level should turn into secondary support. Resistance is at around 3,350. The year’s high was at 3,354.
In the meantime, quarterly momentum has regained its own moving average and its equilibrium line. This is a positive signal. On the other hand, volume did not really expand in the past five trading sessions.
In addition, annual momentum has not recovered. It is moving sideways, and appears ready to break below its own moving average. Annual momentum could recover if the market changes its mind drastically. The 24-month momentum fell marginally but its trend remains upwards.
All in, the STI should continue its rally. However, new highs, although possible, may not be spectacular.
See also: STI’s upside from breakout remains valid as risk-free rates fade, but stay watchful for FOMC
Tuan Sing Holdings (42 cents) surges, short term overbought
In the very near term, prices may be approaching a resistance area at 45 cents. In addition, quarterly momentum is at a one year high. Both short-term stochastics and 21-day RSI are at the top end of their range. ADX is at 54, a one year high.
On Sept 18, prices broke above the several-times tested resistance at 34.5 cents, indicating an initial target of 41 cents which has been attained. The breakout and subsequent ascent has also been accompanied by a consistent surge in volume. This suggests that buying has set in and any retreat next week is likely to be temporary. The three-year high was at 47 cents but there is significant resistance at 45 cents.
See also: Continued steps towards a Chinese New Year rally
Oversea-Chinese Banking Corp ($11.37) still the greatest relative strength
This banking stock continues to maintain greater relative strength than peers. Its uptrend is neat and sustainable, the long term annual momentum and two year momentum indicators are in uptrends, while quarterly ROC, ADX, and moving averages are all positively placed. The 50-day moving average which acts as a support line is at $11.12, and the 100-day moving average is at $10.82.
Prices are now at a thrice-tested resistance at $11.40. A successful breakout indicates an initial upswing to $11.70 and then onwards to $12.60.
