Singapore STI : Weak Uptrend

Technical resistance was at 2,400 points as mentioned in my previous article and the FTSI attempted to test this level a few times early June but failed to close above it. The FTSTI went as high as 2,424.52 points and closed at 2,317.95 points end June. The benchmark index monthly performance was the weakest in three months with only an increase of 3.5%. The monthly performance last month was an increase of 20%. Last month, technical indicators were already showing weakening momentum.


Weekly FTSTI chart with volume as at 26 June 2009 using NextVIEW Advisor Professional


Indicators like RSI, MACD, ADX and Momentum are diverging from the FTSTI last month. This means that the current up trend is weak and there is a low chance that the market can go higher. Resistance level remains at 2,400 points but if the index is able to break and stay above this level, then the next resistance level is at 2,680 points. The drastic change in momentum with strong volume early June shows strong resistance in the market. Market confidence started to falter with a declining trading volume. The market is waiting for cues to take action. With the current indications, the FTSTI is more likely going to pull back to the support level at 2,000 points.

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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.