No surprise then, that equities fell. The Straits Times Index lost 46 points week-on-week to end at 3,282 on Feb 24. Sadly, the STI fell below both a strong support and its still rising 50-day moving average which is currently at 3,303. This, coupled with the former support at 3,306 should be viewed as the resistance area. The 100-day moving average at 3,232 provides support.
Undoubtedly, as the STI enters what could turn out to be a trading range, nimble punters could ‘trade the range’.
As an example, DBS which ended the week at $34.40 could find support at $34 and stage a rebound. Short-term support for UOB could appear at the $29.40-$29.50 range.
Longer term market players, however, may decide to sit out the volatility and stay on the sidelines.
See also: STI may retreat on strong overbought pressures but REIT Index may break out
