SINGAPORE (June 5): On June 2, the Straits Times Index surged by 89 points, along with significant volume expansion. This took the index above its 50-day moving average — now at 2,551— and a resistance area at 2,620–2,650. The breakout indicates a target of 2,889 initially, and 3,000 eventually.

The breakout looks good because the STI moved above its 50-day moving average which had been acting as a resistance line, and a resistance area simultaneously, accompanied by volume and a follow-on.

In the short term, 21-day RSI — which has broken above its own resistance at its equilibrium line — is at 58, which is not overbought. For a 21-day RSI, the overbought level appears at around 78-82.

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