Short-term RSI has eased from a mildly overbought level towards neutral levels and may continue to retreat, albeit modestly. Quarterly momentum and directional movement indicators remain intact.
Ideally, support for the Straits Times Index is at the 3,180 to 3,183, around the 200-day moving average. The index ended the week of Feb 19-23 at 3,184. The 50- and 200-day moving averages have turned up after making a neutral to positive cross in early February. These slow-moving indicators should provide support areas for the index as it digests the gains made since the start of the year of the Dragon.
On Feb 20-21, the STI tested intra-day highs of 3,244 and 3,247, which is in the vicinity of a resistance area identified as 3,240 to 3,250. In the near term, this level may continue to pose resistance. Hence, while the main upmove of the market remains intact, a sideways ranging market, moving between 3,180 and 3,250 may persist.
