An earlier breakout of 3,640 on Nov 7 indicated a measuring object of 3,980, and this remains valid. This target is likely to be reaffirmed if the STI is able to move above the resistance area of 3,800-3,822. Quarterly momentum is trending sideways. If it manages to strengthen, the STI should be able to get to its target.
Indicators appear to be able to support a break above a thrice-tested resistance area around the 3,800 to 3,822 level for the Straits Times Index. During December, the STI retreated towards its 50-day moving averages (currently at 3,733).
Directional movement indicators indicate a strengthening of the STI. ADX is rising and still near neutral levels just as the DIs have turned positive. Elsewhere, moving avearages are intact, and the index remains comfortably above the 50-, 100- and 200-day moving averages.
