Perversely, recessionary fears caused yields on the 10-year Singapore Government Securities to fall. After moving to a high of 3.24% on June 15, the 10-year SGS yield ended the week of June 20-24 at 2.96%.
As a result, the Straits Times Index inched up to 3,111 as at June 24, compared to 3,098 on June 17, a week ago. The current rebound is likely to be temporary. The STI broke below support at 3,160 or thereabout, and this level is likely to provide resistance as short term RSI continues to rebound, albeit temporarily. Hence, the STI could continue to rebound till mid-week of June 27-Jul 1.
Despite this rebound, the chart pattern continues to indicate a downward bias. The break below the neckline support indicates a downside objective of below 2,900. As a result, the STI may move towards at least 3,000 as the chart pattern looks like a double top.