SINGAPORE (Jan 4): On the face of it, the Straits Times Index had a rocky start to the year. The index remains below its 50-, 100- and 200-day moving averages. However, the STI managed to hold above its one year intra-day low of 2,955.

Short-term stochastics has turned up from the bottom of its range and 21-day RSI has rebounded off a support level. Quarterly momentum remains weak but the upturn by short-term indicators should provide the STI with sufficient reprieve to rebound towards 3,100.
Annual momentum continues to fall, suggesting the market is not out of the woods. The STI’s trend as defined by the 200-day moving average remains downwards. A break below 2,955 would indicate a new downside target.

Temporary reprieve for DBS’s share price
Although DBS’s chart pattern indicates that its downtrend remains in force, a temporary rebound is underway. Prices managed to hold above the twice-tested $22.65 to $22.80 range.

The temporary rebound is likely to face resistance at $23.66, a resistance level that coincides with the 50-day moving average. Quarterly momentum continues to point to broadly lower levels over the medium to longer term. An earlier break below $24.40 indicated an eventual target of $20, and this remains valid for the time being.