Central banks made the major moves, albeit less spectacular than at earlier stages in the cycle - the Federal Reserve raised its Federal Funds Rate by 25 bps taking it to 5.25%; the European Central Bank raised its key interest rate, also by 25 bps taking it to 3.25%.
The Straits Times Index experienced minimal movement during first week of May, ended at 3,266 on May 5, down four points week-on-week. On May 3, the STI formed a small hammer on the candlestick chart after a few sessions of decline and a gravestone. Additionally, the STI is making these moves at the near-confluence of the 50- and 100-day moving averages at 3,254 and 3,278 respectively. This range is starting to act as a support area.
Although short term indicators are falling, ADX is at 15, and the DIs are neutral. These indicators suggest that the index may stay within a narrow range, between 3,254 and 3,278. The intra-day low on May 3 was 3,243; the 200-day moving average is at 3,237. These levels should provide support in the event the STI closes below 3,254.
