The upmove is intact. However, short term indicators are at the top end of their range following the move by the Straits Times Index to an intra-day high of 2,903 on Nov 25. This level is marginally above the bottom of the breakaway gap at 2,891 in March. The STI is attempting to cover this gap which should materialise in due course.

As a result of resistance in the gap, the STI ended the week at 2,855 on Nov 27, below the week’s closing high of 2,869. However, medium term indicators remain positive. Quarterly momentum continues to rise at a relatively gradual pace. In addition the STI is above its 200-day moving, currently at 2,622. The 50- and 100-day moving averages made a positive cross at 2,567 on Nov 25, and this is likely to sustain the index when it challenges its resistance at the 2,869 to 2,903 range. A break above this new resistance area would indicate a new upside target but this is likely to materialise later in December.   

Instead, short term stochastics turns down in the week of Nov 30 - Dec 4. This could cause some mild downward pressure. The STI could fall as far as its 200-day moving average but may not dip below it.

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