FTSE Straits Times Index (FTSTI) – Correction is about to end

The Singapore equity market was in a yo-yo swing last month after being bullish for five months. He similar situation happened in the month of June and the market continued its upward rally. The FTSTI traded in a sideway range between 2,521.36 and 2,700.78 points before closing at 2,642.80 on Friday. A month ago, the benchmark index was at 2,659 points. Investors were taking some profits as they are not sure whether the rally can continue. Prices are relatively high or overbought in the short term.


Weekly FTSTI chart as at 28 August 2009 using NextVIEW Advisor

The 20-day Bollinger bands difference is in a level where the current one-month correction is about to end. The momentum indicators are mixed. RSI and Momentum indicators are slightly bullish while the MACD and ADX shows a weakening up trend. Therefore a breakout below or above the immediate support or resistance level will determine the direction of the FTSTI. A break above the resistance level of 2,680 points is likely going to cause the index to rally to the next resistance level at 3,000 points. A break below the 2,520 points support level would likely push the index lower to the next support level at 2,400 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.