Increasingly, indicators are suggesting that selling pressure on the Straits Times Index is likely to alleviate. Week-on-week, the index gained five points ending at 3,207, suggesting that it hardly moved through the week. Prices fluctated in a narrow range, and this has caused dirctional movement’s ADX to fall, and the directional indicators to draw together from a negative stance.
However, the moving averages are falling, and this could cap the rebound at the 3,236 to 3,252 range, which is where the 200- and 50-day moving averages are, respectively. Support has been established at the closing low of 3,173 reached on May 17.
Yields on the 10-year US Treasuries continued to rally through the week, ending at 3.779% as at May 25. This has taken the yield above its moving averages, including its 200-day moving average, now at 3.5991%.
The rebound in these risk-free rates is not positive for equity markets, hence stock market rebounds are likely to be remain temporary in the near term. Further out, there is a chance for a summer rally, in which event, nimble-footed punters may decide to nibble at equities here and there.
