The initial part of the week was slow, with the STI consolidating after an earlier 182-point rally. The dip below the moving averages which took place near the last week of Feb now looks like a temporary blip. The March low of 3,148 has been established as support, but if the market stays resilient and strengthens, support should be moved up to the level of the rising 50-day moving average, currently at 3,314.
As the chart pattern develops, the break above 3,441 would indicate a new upside.
The STI has gained strength against the Hang Seng Index, which ended the week of Mar 21-25 at 21,404, off the week’s high of 22,154. Although the HSI remains below the 50-, 100- and 200-day moving averages which are - in turn - declining, medium term indicators suggest that the index may start to build a minor base. Support appears at around 20,550. As the HSI tests this level, it could stage a meaningful rebound.
See also: STI may retreat on strong overbought pressures but REIT Index may break out
