ADX has turned down from an overstretched high as a sign that the strong downtrend is over. However, smoothed annual momentum is likely to continue declining, suggesting that the STI’s downtrend has yet to end. There is a target of 2,800 which may yet be attained.
City Developments ($8.55) Temporary rebound
Prices rebounded off a two-year low of $7.84. Immediate resistance is near current levels, at $8.70, a level which coincides with the declining 50-day moving average. A positive divergence has materiaised between quarterly momentum and prices. A break above $8.70 would take prices out of a downtrend. Support has been established at $7.84.
