An earlier breakout of 3,640 on Nov 7 indicated a measuring object of 3,980, and this remains valid. This target is likely to be reaffirmed if the STI is able to move above the resistance area of 3,800-3,822. Quarterly momentum is trending sideways. If it manages to strengthen, the STI should be able to get to its target.
Support for the STI is likely to be at the 50-day moving average. A break below this moving average does not imply that the uptrend has been violated, but it could indicate a consolidation phase.
US risk-free rates remain high. Short-term indicators are somewhat overbought and implies a sideways consolidation for the 10-year US treasuries. However, the main uptrend remains intact, suggesting that the market thinks that policy interest rates are unlikely to fall much below 4%.
