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STI pressured by declining momentum and stochastics

Goola Warden
Goola Warden • 1 min read
STI pressured by declining momentum and stochastics
SINGAPORE (Jan 31): On Jan 28, the Straits Times Index fell to 3,181, below the confluence of the 50- and 200-day moving averages at 3,220.
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SINGAPORE (Jan 31): On Jan 28, the Straits Times Index fell to 3,181, below the confluence of the 50- and 200-day moving averages at 3,220.

Chart 1: STI with moving averages and momentum

As prices fell, and in the subsequent four trading sessions, volume rose, but not dramatically. This is an indication that selling pressure is not high. Instead, market participants appear uncertain.

Quarterly momentum turned down and is now in retreat. It is likely to fall below and languish below its equilibrium line.

Resistance is now at the confluence of the moving averages at 3,220. Support appears at the 3,056 to 3,087 range.

Chart 2: Short-term indicators

Short-term indicators are likely to reinforce declining quarterly momentum ADX has turned up from a low level of 10 as DIs turned negative. Elsewhere, short-term stochastics is falling and 21-day RSI is falling.

These indicators suggest that the index is likely to remain under pressure, falling towards 3,087.

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