Although the US and global markets experienced a Biden Bump on Jan 21, the sideways trend displayed by the Straits TImes Index resumed on Jan 22. The chart pattern shows the index staying locked within a narrow sideways range.
SEE: STI down 0.72% despite December NODX expansion
DBS Group Holdings -which broke out of a sideways range at the start of the year - is consolidating its gains. While its uptrend remains intact, the consolidation phase could take prices down to as low as $25.40 and the uptrend would still be intact. DBS’s closing high this year was $27.42 and this was also the one-year high. When prices resume their advance, this level is the resistance that prices need to challenge. Prices closed at $26.17 on Jan 22.
CapitaLand Integrated Commercial Trust retreated on Jan 21-22. Early in the week, it broke out a several times tested sideways range at $2.28-$2.29 level. This level should be able to support the current retreat. The 21-day RSI is likely to retreat as it has formed a minor negative divergence with price. Quarterly momentum should remain resilient as its uptrend continues to be in force. Volume contracted as prices fell, suggesting that selling could be weaker than buying pressure when prices broke out of $2.28. CICT ended the week of Jan 18-22 at $2.28.
For STI, the roundophobic/ roundophilic 3,000 level continues to provide a pyschological barrier. Although the index had already moved above a resistance area of 2,795 to 2,900, indicating an initial upside of 3,282 which was the Jan 2020 high, the 21-day RSI could weaken, and short term stochastics could turn down. In this event, the STI is likely to stay within a sideways range in the last week of Jan, and support remains at the low end of the resistance area at 2,795. Quarterly momentum remains relatively resilient. In addition, the moving averages are positively placed suggesting that the consolidation is temporary, and the uptrend should resume.
