SINGAPORE (Aug 2): Quarterly momentum has broken down and has weakened considerably since end July. The Straits Times Index slipped below the confluence of the 50- and 100-day moving averages at 3,277 and 3,278. The breakdown took place on expanding volume, a sign of selling. The next support appears at 3,200. However, since medium term indicators have weakened, with ADX turning up and the DIs have turned negative, the STI may fall below 3,200, to the support low of 3,110 reached on end-May.

Short term indicators are weak. Stochastics is falling after turning down from the top end of its range, and 21-day RSI is also in sharp retreat. Annual momentum has turned down, but it remains above its own 40-week moving average.

In general blue chips are likely to continue their correction/selloff for the first two days of the week starting Aug 5. DBS Group Holdings should find initial support at $25.20, while Oversea-Chinese Banking Corp is likely to meet with support at around $10.90-$11.00. Singapore Telecommunications has retained its strength against the broad market – but it’s best to keep an eye on $3.28, below which the immediate uptrend is broken

ComfortDelgro’s uptrend in danger

Prices are on an uptrend, and this is intact as prices stage a corrective move towards its 50- and 100-day moving averages at $2.66 and $2.61 range. Quarterly momentum appears poised to break below its support and equilibrium line. ADX is falling, although the DIs are negatively placed. Volume is low, suggesting that prices may not stage a sharp decline. But prices could still drift lower, towards $2.61 and possibly to $2.50.