The new year would probably see the Straits Times Index still entrenched within a narrow range. Week-on-week, the index closed almost unchanged at 2,843. The sideways trend, in force since early Nov 2020 has seen support established at the 2,795 to 2,800 range. Resistance stays at the Nov 2020 high of 2,891 to 2,900. The overall trend remains upwards.
Short term indicators have not changed much since the week leading up to Christmas. Short term stochastics has turned down mid-range. ADX continues to fall, and the DIs remain neutral, an indication that the index is likely to remain rangebound for the next couple of sessions. Quarterly momentum, interestingly, remains intact and looks resilient. In addition the moving averages are positively placed. Hence the rising 50-day moving average is likely to act as a support line.
To err on the side of caution, components of the STI have not strengthened. High profile stocks such as CapitaLand, City Developments and Keppel Corp remain within their tight ranges, giving no hint of upside breakouts so far. Of them. Keppel Corp appears closest to an upside break. CapitaLand has just eased after attempting to move above the thrice tested $3.24 to 3.28 range.