The more sombre observation is that the STI’s volume has contracted. This may have to do with market-watchers staying on the sidelines, as they observe liquidity in the local market gradually shrinking.
The Straits Times Index gained 23 points to end the week of May 13-17 at 3,313. Despite the gain, the feeling all round was the market was moving sideways as gains were confined to a relatively narrow segment of the market. Nonetheless, the STI is likely to meet with its upside of around 3,360 following the break above 3,250.
For the local market and the STI in particular, the good news is that both medium- and long-term momentum indicators are intact, as are the moving averages. The rising 50-day moving average is currently at 3,231 and rising at around 3 points a day. Hence, it is fairly distant from the level of the index. As a result, the STI’s movements are likely to be gradually upwards, with upmoves punctuated by retreats.
