Hence, any further rebound would remain underpinned by short-term indicators which are less powerful than long-term indicators such as annual momentum and two-year momentum. Both these indicators have flattened but remain beneath their equilibrium lines.
The declining 100-day moving average had been providing resistance for much of July and August. It is now beneath the index, at 2,577, and has turned up. It needs to move above 2,627 for the STI to gain strength.
In the coming week, the index should stay steady, although the range is likely to remain narrow, with rebounds capped at 2,627. If the STI is able to stay above 2,577, and volume builds up, that could be the sign of an impending rally.
See also: STI may retreat on strong overbought pressures but REIT Index may break out
