Home Capital Right Timing

STI’s downtrend to persist despite temporary bounce

Goola Warden
Goola Warden5/13/2022 6:38 PM GMT+08  • 1 min read
STI’s downtrend to persist despite temporary bounce
The STI looks weak following its break below its 200-day moving average. The rebound of May 13 is likely to be temporary.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

The Straits Times Index fell 100 points week-on-week to 3,191 by May 13. On May 12, the STI touched a low of 3,165, falling below the 200-day moving average, currently at 3,217. Following the decline below the 200-day moving average, the STI appears to have built a rather large top.

Initially, though, short term oversold pressures could cause a temporary bounce in which event resistance appears at the breakdown level of 3,300. If the market is weak - which it is likely to be - the index in unlikely to reach 3,300.

The next important level for the STI is at 3,150 because this could turn out to be the neckline of a double top. When (not if) the index breaks down from this level, a downside objective would be indicated. The year’s low is also at 3,150. The next support appears at the one year low of 3,041.

The STI’s medium term indicators are weak, with quarterly momentum retreating, and directional movement taking on a negative stance, both suggesting ongoing weakness for the STI.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.