The local market has stabilised after Nov 30, when Sea’s weightage in MSCI Singapore rose to 50%. This re-weighting caused the Straits Times Index to fall sharply to 3,041. The STI remained relatively steady during the week of Dec 6-10, ending the week at 3,135. At this level, the STI remains below the confluence of the 100- and 200-day moving averages at 3,142. The index needs to regain the 3,142 level to have any chance of upside breakouts.
In Hong Kong, which has been racked by the gradual default of China Evergrande Group, the Hang Seng Index rose 229 points during the week of Dec 6-10 to close at 23,995 after touching a low of 23,349 on Dec 6. The HSI remains below its declining 50-day moving average is currently at 24,871.
Since the chart pattern shows that HSI in a downtrend, troughs need to be monitored as any support they provide is likely to be temporary. When a trough is tested and holds, the index is likely to start ot bottom. The level to watch is 23,349.
See also: REIT Index points to upside as STI continues consolidation
