To offset this downward pressure, quarterly momentum has flattened and has started to display a mild positive divergence with the index. In and of itself, positive divergences could limit declines but are unlikely to trigger upmoves unless quarterly momentum is able to breakout on the upside. This is not likely in the near term. Sometimes, positive divergences can last for weeks, and at times for more than a month.
The Straits Times Index (3,099) ended the week of July 12-15 near the bottom of a narrow sideways range after retreating from an intra-week high of 3,145 attained on July 7, and down 32 points week-on-week. On July 14, the STI touched a low of 3,091.
Indicators are mixed. Moving averages are likely to exert downward pressure on the index. The 50-day moving average -currently at 3,171 - is likely to continue falling. The 100-day and 200-day moving averages, at 3,252 and 3,228 respectively, appear poised for a negative cross in the next six trading sessions. This could exert more downward pressure on prices.
