Right timing: STI’s upclimb supported by momentum and moving averages

Right timing: STI’s upclimb supported by momentum and moving averages

By: 
Goola Warden
20/04/19, 10:11 am

SINGAPORE (Apr 20): There has been little change in the trend and chart pattern of the Straits Times Index.

The index has been on a very glacial ascent towards 3,420, the target indicated when the index broke out of resistance at 3,190 in mid-Jan.

Quarterly momentum eased during the past four trading sessions. The 100- and 200-day moving averages have turned positive.

This coupled with positively placed DIs and rising ADX should continue to underpin the STI.

The only cautionary signals are the somewhat overbought levels of short term stochastics and 21-day RSI, and stagnant volume.

Annual momentum is turning up, another sign that the STI should remain resilient.

DBS Group Holdings’ chart pattern looks very similar to the STI’s with its 100- and 200-day moving average having also made a positive cross.

However, the upside of $27 indicated when prices moved above $24.50 is at hand, and volume has started to fall off while ADX is at a one year high, suggesting that the immediate upside could be limited.

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