Quarterly momentum has faded somewhat and has retreated towards a support level at its equilibrium line. The indicator should be able to hold at this level.
While annual momentum appears slightly weak, the 104-week (two-year) momentum has strengthened, and that could put a floor under the index near current levels.
North Asian markets appear mixed. While the Shanghai Composite Index (3,233) pulled back to 3,214 from a high of 3,443, its chart pattern is a lot stronger than that of the Hang Seng Index. Overall, Asian markets should continue to strengthen over the next several weeks and months. In the US, the S&P 500 (3,215) appears to have stalled near its resistance range of 3,200–3,300.
As a result of the different undercurrents of global markets and its own indicators, the STI is likely to meander sideways within a narrow range, with support at 2,600 and resistance/breakout at last week’s close of 2,652.
