SINGAPORE (May 8): The Straits TImes Index is at an interesting juncture. It has approached a secondary resistance level at 2,620 or thereabouts, a level that now coincides with its declining 50-day moving average. Quarterly momentum has already broken above its own moving average, suggesting that the index could follow suit. Such a move would reconfirm the STI’s earlier break above 2,561 which had indicated a target of 2,890.

The STI’s ADX, which helps to distinguish between a trending market and a ranging market, is at 16, which is low. However, this indicator has stopped falling. An upturn, if it materialises along with the DIs turning positive, would be the signal with which the index would attempt to clear its secondary resistance level. At present, the DIs are neutral.

Other short term indicators remain ambiguous. Stochastics has stopped falling in mid-range; the 21-day RSI is moving sideways at its neutral level.

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