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Right timing: Upside for immediate rebound at 3,264

Goola Warden

STI with moving averages and momentum
(June 14): Short term stochastics is rising and has the potential to move up further, indicating another four to five sessions of rally.

Rising stochastics is being reinforced by rising 21-day RSI. These indicators should be able to sustain a further rise in the Straits Times Index to 3,264.

Quarterly momentum is rebounding but it could face resistance in the next couple of sessions, which would in turn stymie the STI’s rally. Elsewhere, ADX is falling as DIs have turned neutral from negative.

Support has been established at 3,110 as at end-May.

Annual momentum remains weak. The impact of the various indicators suggest that the index may move into a rather broad trading range with 3,264 as a sort of ceiling, and 3,110 as a floor.

Singapore Telecommunications ($3.33) has surged significantly since end-May, after breaking out of $3.17.

While up-momentum remains intact, and quarterly momentum remains in rising mode, short term stochastics and 21-day RSI are at the top end of their range, and as such would be unable to rise further.

Quarterly momentum is at a three year high.

Singapore Telecommunications with moving averages and quarterly momentum
 
ADX too is at a one-year high. In sum both short and medium term indicators are significantly over-extended suggesting that the immediate upside is likely to be limited. Immediate resistance appears at $3.44.