FTSE Straits Times Index (FTSTI) – Further downwards correction

The FTSI was bullish in the first three weeks of last month and started to correct last week. The FTSI went as high as 1,947.30 points last week, near the 2,000 points resistance level from the double bottom chart pattern formation, before settling at 1,818.61 points today, after falling 34.24 points today. The FTSTI was up 107 points or 6 percent on month. The bullish factor was the better-than-expected financial and economic in the US, Singapore’s largest trading partner. There is still a concern over the sustainability of the economic improvement.


Daily FTSTI chart as at 27 April 2009 using NextVIEW Advisor. Click on chart for larger view.

The longer term moving averages (60 and 90 days moving average) have started to increase slightly last month indicating a bullish trend. There is a divergence between the momentum indicators and the FTSTI and this means that the uptrend is getting weaker. The averages are currently between 1,700 and 1,750 points. Therefore at 1,818.61 points, the FTSTI is still considered overbought expected to correct further downwards towards this range level. If price breaks above the resistance level at 1,950 points, then we may expect the FTSTI to continue the up trend.

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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.