Among the stocks that have moved above resistances and the 50- and 100-day moving averages is Singapore Airlines, which closed at $3.83, taking it above the top of a base area at $3.59 to $3.82. SIA rose to a high of $3.92 before easing. Ideally, support is at $3.82, implying that prices should push higher from current levels when trading resumes in the week of Nov 16-20. The break above $3.82 indicates an upside of $4.25.
SATS rose some 20 cents or 5.5% on lucky Friday 13. As such, prices may ease following such strong gains, in particular since stochastics is peaking at the top end of its range. Any retreat should find support at $3.28. This level represents a twice tested level that doubles up as the top of a base formation. The break above this level which took place on Nov 9, indicates an upside of $4.04.
The rally by the Straits Times Index should continue, since the index has risen above its key moving averages. During the week of Nov 9-11, the STI rose a further 133 points, taking the total the index has gained in the past 10 sessions to 288 points, ending at 2,711. The rally, underpinned by rising volume initially, has managed to take the STI above its 200-day moving average, currently at 2,640, a level that should now provide support. Resistance appears at the bottom of the breakaway gap formed on Mar 9, at 2891.
In the immediate term, short term stochastics is approaching the top end of its range and is starting to peak. This, coupled with a minor downturn by ADX, could cause the rally to pause. Since quarterly momentum has broken above a resistance at its equilibrium line and continues to build on an uptrend, any retreat in the week of Nov 16–20 is likely to be shallow and temporary.
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