SINGAPORE (Nov 16): Quarterly momentum is strengthening and has broken above a resistance and its own moving average. The strength of this indicator could trigger a breakout by the Straits Times Index.
Immediate resistance has been recalibrated to the Nov 2 high of 3,116, a level which now coincides the declining 50-day moving average of 3,115. The upturn by quarterly momentum is likely to be reinforced by the recovery of the 21-day RSI.
A break above 3,116 would see the index heading towards 3,131 initially, but prices could move as as high as 3,266, the measuring objective obtained from the chart pattern.
Annual momentum continues its downtrend, limiting the rally should it materialise. While strength could return in the near term, the STI is likely to remain below its declining 200-day moving average.
