SINGAPORE (Mar 17): Here are some charts for our technical analysis this week:
Straits Times Index (3,512, daily)
The Straits Times Index inched up by 27 points over the week as the chart pattern became clearer. Prices appear to be forming a triangle which can be a continuation pattern in an uptrend.
For the next few sessions, the index is likely to continue moving within this triangle. ADX is falling and is now at 18 with the DIs neutral. This indicates that the STI’s trending ability is weak, and the index is likely to stay entrenched within a range. Immediate resistance appears at Feb’s rebound high of 3,540. Support is at the rising 100-day moving average at 3,448.
Quarterly momentum managed to hold above its equilibrium line and may continue to do so this week. However, annual momentum has drifted below its own moving average and is in a gradual downturn. This almost confirms that the largest gains are over for the 2016-2018 cycle.
SingTel ($3.49, daily) attempts breakout
Prices have broken above a twice tested resistance at $3.40, accompanied by an expansion in volume.
The positive divergence between price and quarterly momentum, coupled with a move above their respective moving averages by both price and momentum suggest that the breakout could be valid.
In this event the upside is at $3.60, a level that coincides with the still declining 200-day moving average. Support should be kept at the breakout level of $3.40.
Creative Technology ($6.62) moves sideways as ADX turns down
Creative Technology’s most volatile moves appear to be over for the time being. ADX has turned down from an overextended high of 68, and the DIs are converging after moving to overextended levels.
Additionally, daily volume has fallen dramatically, from the 7 million to 9 million range to just 413,000 shares. Quarterly momentum has also turned down from an overbought high.
These indicators are suggesting that the tight sideways range may persist. Support has been established at $6.40 and resistance appears at $6.82.
