The upside of 4,000, indicated from the break above 3,240, remains valid. When prices reach the old high of 3,831, a correction could materialise. Noise from global markets, in particular Nasdaq may cause the STI to wobble now and again. For the time being, support stays at 3,240.
The Hang Seng Index rose 1,023 points to 24,573 in the short week of Jan 31- Feb 4. The index is attempting to move above the 100-day moving average at 24,473. Since the HSI ended at the day’s high on Feb 4, it is likely to clear the 24,473 more decisively in the week of Feb 7-11. Quarterly momentum has risen to a resistance area at its equilibrium line. This is the sixth attempt - in the past six months - at breaking above resistance at the equilibrium line.
On a neutral note, ADX is low and falling, suggesting that this indicator may have to strengthen further before the HSI moves decisively higher. Support should be kept the 50-day moving average at 23,802.
See also: STI may retreat on strong overbought pressures but REIT Index may break out
