On the weekly chart, the three-month weekly directional movement indicators have just turned positive. ADX has turned up from a low level. The directional indicators (DI) on the weekly chart have managed to turn positive for the first time in three months. This suggests that any retreat is likely to be temporary, with prices set for higher levels.
The STI’s three-month weekly directional movement and its main component ADX are trend indicators. Other trend indicators such as the 52-week and 2-year moving averages are poised to turn positive. In addition, the 50-, 100-, and 200-day moving averages are positively placed on the daily chart. Against this backdrop, the weight of the evidence based on technical indicators suggests that the STI’s upside target of 4,400 should be met in weeks rather than months.
The FTSE ST REIT Index (REIT Index) remains near the top of a minor base formation at the 650 to 660 range. It ended the week of July 7-11 at 655 which places the REIT Index at the confluence of the 52-week and 2-year moving averages. The Index has moved above its flat 200-day moving average, and quarterly momentum has broken above its equilibrium line suggesting it’s only a matter of time before the REIT Index breaks out.
See also: Can the STI hold above 4,000?
Note, though, that the 10-year yield on Singapore Government Securities rebounded by 5 basis points from the low of 2.06% reached on July 7.
