Singapore STI: Technical Rebound expected

The Singapore market was drifting sideways with a downward bias as worries about soaring crude oil price and other commodities may lead to lack of confidence in the equities market. As of Friday, the STI closed at 2,892.54 points. The STI went to a low of 2,862.27 on Thursday and formed a Candlestick “Doji” pattern which represents uncertainty and on Friday, that pattern turned into a “morning star” which represents a price reversal. Therefore, a technical rebound is expected to happen. Furthermore, the STI is currently oversold in the short term as Stochastic is below 30 and the average price range for STI is between 3,000 points and 3,100 points.

The current trend is still down and with strong momentum. This means that the technical rebound may be small and down trend shall resume once the rally on the rebound is over. Resistance is expected to be at 3,000 points while support level, which is a major one, is at 2,750 points. By Benny Lee