FTSE Straits Times Index (FTSTI) – Strong resistance at 2,700 points

The market faces heavy resistance when the FTSTI is at 2,700 points level. The market has been testing this level 4 times in the past one month but failed to break above it. The last test on the resistance level was on the 23rd of September and then fell for two days to close at 2,662.82 points on the 25th. It was another yo-yo month for the Singapore equity market which has gone into a bullish trend correction since mid-August. The benchmark index was still able to end positively month to month with an increase of 44 points or 1.7%.


Weekly FTSTI chart as at 25 September 2009 using NextVIEW Advisor

Technical indicators have been neutral for the past two months but are forming a divergence against the index. The momentum indicators on the weekly chart seem to be more bearish. The market may have peaked at 2,700 points. The FTSTI has increased almost 80% from the low of 1,500 points in March. If the index stays between 2,500 and 2,700 points support and resistance levels, it is still in a correction. If the FTSTI breaks above this resistance level, we may expect the index to test the next resistance level at 3,000 points and if market continues to fall and the FTSTI breaks below the support level, the index is expected to fall to the next support level at 2,200 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.