The end-of-week correction in the Straits Times Index appears par for the course as the index had moved to overbought highs, and is unlikely to change the main uptrend. The 50-day moving average, which acts as a support line, is at 4,758. On Jan 13, the STI closed at 4,937, up four points week-on-week. If the index fell to 4,758, the uptrend would still be intact.
In the short term, prices could continue to ease. 21-day RSI has broken below a support and minor top formation after hovering around the 75 to 91 range. This may cause the STI to move towards 4,758. Resistance has been established at 5,021, the high reached on Feb 12.
