SINGAPORE (Mar 10): Here are two charts for our technical analysis this week:
Straits Times Index (3,485, daily)
The Straits Times Index rose a mere 6 points over the week. The index is entrenched between the 50- and 100-day moving averages at 3,495 and 3,448 with these levels acting as near term resistance and support.
Technically indicators contiue to weaken. Quarterly momentum remains in declining mode but could meet with support at its equilibrium line. Annual momentum has drifted below its own moving average and is in a gradual downturn. Two-year momentum has turned down for the first time since Nov 2016, but its trend remains upwards. ADX continues to fall and DIs have turned mildly negative. Elsewhere, 21-day RSI has turned down.
The net result is likely to be a further decline for the STI from current levels, with support appearing at 3,448 initially. On Feb 9, the STI fell to low of 3,340, holding above the 200-day moving average at 3,328 before rebounding. The rebound high of 3,574 was reached on Feb 27. This level may turn out to be resistance. Increasingly, though, it appears like the the largest gains are over for the 2016-2018 cycle.
Creative Technology ($6.54)
Abandoned baby doesn’t mean a bottom
The short term abandoned baby bottom on the candlestick chart may not imply that prices are going to rush up again. Signs are emerging that the huge volatility of the past two weeks is likely to abate in the near term as volume shrinks.
Prices could rebound mildly from $6.54. But stochastics has turned down, and directional movement may have peaked which could cause a sideways drift. Eventually an uptrend could develop but it is likely to be on a more gradual gradient.
