The STI’s overall uptrend remains intact. It had moved to a two-year high of 3,354 on July 27 before retreating. Early last month, the STI broke out a thrice-tested resistance area at 3,265-3,270. This level should act as support. The breakout indicated a near-term upside of 3,400, reinforcing the main target of 3,500 which was obtained in January.
Both annual and two-year momentum remain in rising trends with two year momentum looking particularly strong.
Tuan Sing Holdings (35 cents) attempting breakout
Prices are attempting to clear a several-times tested resistance at 34.5 cents. A successful breakout indicates a target of 41 cents. The probability of a breakout looks good. Quarterly momentum has broken above its own equilibrium line, along with 21-day RSI. ADX turned up last month, and DIs are positively placed.
In addition, volume expanded markedly on Friday (Aug 4) to 5.9 million shares on a white candle day, a sign of demand. During much of June and July, volume barely rose above a million shares a day. The three-year high was at 47 cents but there is significant resistance at 45 cents. The breakout will be seen as being successful if prices can stay above 34 cents over a three-day period.
Oversea-Banking Chinese Corp ($11.21) relative strength intact
Although a correction of sorts could set in, this banking stock continues to maintain greater relative strength than peers. Its uptrend is neat and sustainable, the long-term annual momentum and two-year momentum indicators are in uptrends, and quarterly ROC, ADX, and moving averages are all positively placed. The 50-day moving average which acts as a support line is at $10.68, and the 100-day moving average is at $10.13.
In addition to a series of negative divergences between price and 21-day RSI, quarterly momentum has fallen below a secondary trendline. RSI is also suggesting that prices are likely to consolidate the gains made in July. A week ago, the candlestick chart formed a harami or inside day pattern and that has caused the upmove to stall. The “roundophilic” level of $11.00 provides psychological support and $10.68, the next level of support.
The uptrend is likely to continue after the consolidation. A minor swing could materialise to $11.70 and $12.60 eventually.
