It may take another quarter of consolidation before the STI makes its break. Interestingly, a successful breakout indicates a significant upside objective.
The Straits Times Index ended the week of Jan 9-13 at 3,296, up 17 points week-on-week. On Jan 9, the STI formed a shooting star-like pattern on the candlestick chart when the index rose to a high of 3,325 but closed at its low, at 3,305. The closing price represents the area near the four times tested resistance at 3,306. This level continues to pose significant resistance and a successful breakout would be meaningful but appears unlikely.
At present, the STI may not have sufficient momentum to break out of this resistance. Indeed, quarterly momentum continues to rise. However directional movement indicators do not support an uptrend. ADX is at 12, which is low and indicates a sideways trend. This is despite the DIs being positively placed.
