SINGAPORE (Oct 11): It appears that the Straits Times Index managed to hold at 3,078 on Oct 4, in the area of a previous support and above the Aug 28 low of 3,056. Quarterly momentum has rebounded off a one year low. Volume expanded a little on white candle days, but has generally stayed subdued, suggesting that the market is attempting to bottom.
Chart 1: STI with moving averages and momentum
The moving averages remain negatively placed with 100- and 200-day moving averages starting to diverge after a negative cross. The declining 50-day moving average is currently at 3,147, and this level is the likely resistance/ breakout level for the STI.
Chart 2: Short term indicators
Short term stochastics is turning up from the bottom of its range. Selling pressure has abated as evidenced by the downturn of the -DI. ADX remains flat, and the DIs are still negatively placed. The rebound above 3,100 is a positive development as this level is both a price resistance and psychological resistance. With 3,100 broken on the upside, the next level to watch is 3,147.
Chart 3: Mandarin Oriental International tries to strengthen
Prices appear to have formed a bottom, after making a low of US$1.37 in early Sept. Quarterly momentum confirms the breakout and upmove. Resistance appears at US$1.90.
