During the week of Mar 28-Apr 1, the Straits Times Index tested its Feb 17 high of 3,441, and ended Mar 30 at 3,442 before retreating to close marginally lower at 3,419. The move established 3,441 to 3,442 as the resistance-breakout for the impetus to test a new 2022 high. Since both quarterly and annual momentum are in uptrends, and Directional Movement is neutral and set for a positive turn, the probability of a breakout is relatively high. In this event, we should err on the side of caution, and look to 3,500 as a roundophic resistance level. This is despite a measuring objective of 3,736 indicated from a potential breakout. Support has been established at 3,329, at the rising 50-day moving average line.
Meanwhile, the Hang Seng Index needs to rise above its 50-day moving average, currently at 22,836. The HSI ended the week of Mar 28- Apr 1 at 22,039.
Analysts are reporting that Chinese companies including those listed in Hong Kong have started share buyback programmes to support prices. This may support the HSI at the 22,000 level. Technically, indicators are neutral to negative. Quarterly momentum is flat and would need to rise above its equilibrium line to trigger a sustained rebound.
