Singapore Market: Strong bullish momentum

The FTSTI rebounded strongly a month ago when the low was at 1455.47 points. It is currently at 1,820.87 points, a three months high and 25% from the low in March. Positive developments in the US have uplifted some investors’ confidence. The technical rebound was long overdue as the market kept on falling since the beginning of the year. The FTSTI is up 292.36 points or 19 per cent on-month. Market looks like it is bottoming-out as a double-bottom chart pattern is currently forming. The double bottom formation is a bullish reversal pattern and will only be confirmed if the index breaks above the neckline at 2,000 points.


Weekly FTSTI chart as at 3 April 2009 using NextVIEW Advisor. Click on chart for larger view.

The FTSTI is now above the longer term 90-day moving average. It needs to stay above this moving average to turn the current long term trend to bullish. The momentum indicators like RSI and MACD indicates strong bullish strength. However, the Stochastic indicator is currently heavily oversold and the uncertain movement today with strong volume indicates that the index may start to pullback. Therefore expect market to correct downwards in the earlier part of this month before continuing its up trend to test the 2,000 points resistance.

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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.