Overall, the STI is likely to continue to gain strength against both the MSCI Singapore Index, and the Hang Seng Index (currently at 21,412). The HSI which has reached a rebound high, could well retreat in the week of Mar 21-25, back towards 20,000.
The Straits Times Index continued to rally in the week of Mar 14-18 ending the week at 3,330. At this level the STI is back above its moving averages, including the 50-day moving average which is currently at 3,299. The March 8 low of 3,148 looks likely to be the trough for the next few months.
In the immediate term, the 182-point rise in six trading sessions has caused short term indicators to move to the top end of their range. Hence a consolidation could materialise shortly. Any retreat or easing in the index is likely to find initial support at the 50-day moving average. Since quarterly momentum rebounded off its equilibrium line, it should continue to underpin the STI and enable it to test a resistance at 3,441, which was the Feb 17 high.
