The upmove is intact. However, short term indicators are at the top end of their range following the move by the Straits Times Index to an intra-day high of 2,903 on Nov 25. This level is marginally above the bottom of the breakaway gap at 2,891 in March. The STI is attempting to cover this gap which should materialise in due course.
As a result of resistance in the gap, the STI ended the week at 2,855 on Nov 27, below the week’s closing high of 2,869. However, medium term indicators remain positive. Quarterly momentum continues to rise at a relatively gradual pace. In addition the STI is above its 200-day moving, currently at 2,622. The 50- and 100-day moving averages made a positive cross at 2,567 on Nov 25, and this is likely to sustain the index when it challenges its resistance at the 2,869 to 2,903 range. A break above this new resistance area would indicate a new upside target but this is likely to materialise later in December.
Instead, short term stochastics turns down in the week of Nov 30 - Dec 4. This could cause some mild downward pressure. The STI could fall as far as its 200-day moving average but may not dip below it.
For more stories about where the money flows, click here for our Capital section
City Developments ended the week of Nov 23-27 unchanged at $7.75, after testing a closing high of $7.97 on Nov 24. This level coincided with the still declining 200-day moving average. At the same time, quarterly momentum met with resistance at its equilibrium line. A temporary consolidation is underway, for which support remains at $7.45. A breakout should materialise in due course. If so, this counter is likely to break out of its base setting an upside of $8.44.
Singapore Airlines continues to show strength despite a minor retreat. It has broken above its 200-day moving average at $4.17, and as this moving average flattens, it is likely to provide the new support. In the meantime, the 50- and 100-day moving averages have made a positive cross, and turned up simultaneously. This signals strength, and was reinforced by a continuously strengthening quarterly momentum. In the immediate term - that is in the week of Nov 30 to Dec 4 - prices may consolidate but this is likely to be mild. Prices originally broke out of a minor base formation in Nov, setting a target of $4.50 which is now at hand. There is an altogether larger base formation, the top of which is the four-times tested resistance at the $4.50 to 4.60 range. A breakout of this higher range is likely in view rising momentum. This in turn indicates an upside of as high as $6.83.
SEE: STI up 0.71% following better-than-expected FY2020 GDP growth
