Strength in Singapore Equity Market

The volatility of the Singapore market has eased further. The Monthly Average Range fell by half from about 600 points two months ago to 300 points. The STI was expected to be range bound and it did just that. For two months, the STI was trading sideways. The STI was trading between 1,638 and 1,844 points this month and closed at 1,736.99 points, near last month’s close. Investors continue to stay in the sidelines waiting for more positive developments in the times of recession.

Technically, the STI is below the mid and long term 60 and 90 day moving averages and this indicates that the STI is in a major down trend. The STI is currently hovering above the short term 30 day moving average but the average is still declining. The STI is in a major down trend correction with a revised support and resistance levels between 1,580 and 1,900 points respectively.

A triangle chart pattern is formed confirming the correction. There is some strength in the short term upward rally. There is a convergence between the STI and the RSI indicator. The STI is expected to maintain in this range and with this little strength in momentum, the STI may test the resistance level.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

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