By May 27, the Straits Times Index lost 10 points week-on-week to end at 3,230. Interestingly, the chart pattern is reflecting some latent strength. As a starting point, the STI is attempting to hold on to its peep above the 200-day moving average at 3,219. As a result of the STI’s steady sideways movement during the week of May 23-27, the 200-day moving average has actually risen by one point during the week. This may be a miniscule move, but it is an encouraging one.
The STI is still not out of the woods, as quarterly momentum remains in negative territory. The economic environment remains somewhat dour, with the yield on the 10-year Singapore Government Security (the so-called risk free rate) at 2.63% on May 27. While this is lower than the 2.92% recorded on May 9, it is still way above the 1.7% at the start of the year.
Resistance for the rebound stays at 3,300. The state of the indicators suggests that a move above this level is unlikely.