SINGAPORE (July 19): The Straits Times Index is at its highest level since it peaked on Apr 4 at 3,407. Quarterly momentum has strengthened at its equilibrium line, and appears poised for an upturn. Short term indicators are falling. Short term stochastics and 21-day RSI are coming off the top of their range, and their levels are still in an elevated area. ADX is falling, and the Dis are neutral – this indicator suggests that the index may stay within a range. Volume has not expanded sufficiently for prices to break above 3,207.

There hasn’t been much change in annual momentum. It stalled after moving marginally above its equilibrium line. Annual momentum would need to breakout decisively. If this materializes, prices would break above 3,407 indicating a new upside.  

Wilmar tests five year high

Prices are testing its twice tested five-year high of $3.92. The chart pattern looks bullish, but indicators do not support further significant gains in the near term. Volume is contracting as prices rise, quarterly momentum has turned, and short term indicators are also falling. If prices ease, support appears at $3.60, an earlier breakout level.

Singapore Telecommunications ($3.54) remains at 1-year high

Prices are hovering at a one year high, and near a former resistance area at $3.60. An earlier breakout above $3.30 indicated an upside of $3.60 indicating that this level is likely to provide formidable resistance. Volume has contracted significantly, and quarterly momentum could weaken. Support for any retreat appears at $3.30.

A successful breakout would indicate a new upside but this could take a few weeks.