SINGAPORE (May 25): STI tests support at moving averages
Despite a mild 16-point downward drift, the Straits Times Index is at an important juncture, as it tests the confluence of the 50- and 100-day moving averages at 3,507 to 3,510. Quarterly momentum retreated but could hold at its equilibrium line.
ADX is low at 13.5. This coupled with negatively placed DIs suggests that prices are likely to drift sideways with a mild downward bias. Short term stochastics could turn up, and this could trigger a mild rebound. Resistance stays at the twice tested 3,609 level.
The moving averages remain intact but could start looking precarious if prices are unable to hold above 3,500 during the week of May 28 - June 2.
Venture Corp breaks below 200-day moving average
After whipsawing the 200-day moving average for the past two weeks, prices have broken below the moving average -- currently at $20.98. Both quarterly and annual momentum have turned down.
Although prices should attempt rebounds from time to time, the counter may have peaked and could drift sideways to lower. The next support appears at the May 2 low of $18.87. If prices regain $21, the the downturn would be invalidated. This is unlikely but not impossible.
City Developments is oversold short term
Prices have fallen below the 200-day moving average at $12.26, and the 50- and 100-day moving averages have turned down at $12.70. Short-term indicators are at oversold lows and this could trigger a temporary rebound towards $12 to $12.20. Further out, the downtrend may resume. Quarterly momentum is in negative territory and likely to fall further. Support appears at $11.05.
