CFA Society Singapore
SINGAPORE (Jan 18): The rally by the Straits Times Index may encounter resistance as it approaches its declining 200-day moving average at 3,251. This may occur at a time when short term stochastics is approaching the top end of its range. The 21-day RSI is also near the top end of its range.
Any retreat should meet with support at 3,153. The pause may be temporary as quarterly momentum is strong having surged above its equilibrium line. In addition, the 50- and 100-day moving averages are set for a positive cross later this month.
All in, the market is set for a firmer tone for the rest of the month.
Olam breaks out of resistance
Prices broke above resistance at $1.77 on Jan 18 and has held above its 50-day moving average at $1.70 on Jan 7. The breakout was accompanied by a significant expansion in volume although overall, absolute volume figures are low. Quarterly momentum looks set to strengthen, and could move above its own equilibrium line. Resistance/upside is at $2.00.