In the near term, the STI may continue to move within a narrow range with support remaining at the breakout level of 3,250 a level that almost coincides with the rising 50-day moving average, currently at 3,245. Resistance remains at 3,350. Eventually, the index should be able to clear this resistance area and when it does, a new upside at significantly higher levels are likely.
Although price movements for the Straits Times Index were almost non-existent with the three point week-on-week gain to 3,316 during May 20-24, indicators continued to strengthen, and the chart pattern remained resilient.
The moving averages remain intact, and are in good order. Quarterly momentum looks a trifle off-colour, but short-term RSI and directional movement indicators are in the neutral to positive range.
