On the weekly chart, the three-month weekly directional movement indicators have just turned positive. ADX has turned up from a low level. The directional indicators (DI) on the weekly chart have managed to turn positive for the first time in three months. This suggests that any retreat is likely to be temporary, with prices set for higher levels.
The 21-day RSI of the Straits Times Index (STI) and its quarterly momentum are at their highest levels in five years pointing to an overbought situation. Hence, although no negative divergence has appeared on the charts between the index and its indicators, in the near term, there is likely to be a pause in the rally, as the index hovers around its current level of 4,087, in order to alleviate short-term overbought pressures.
Since the 4,000 level provided resistance on the way up, it is likely to provide support during the corrective/consolidation phase.
