Since the STI remains above its 200-day moving average, technically, its uptrend remains intact. ADX has turned down, but is above 20. The DIs are still postiviely placed. However, quarterly momentum is falling and this will pressure the index with lower levels likely during the week of Dec 23-27.
Resistance has been established at 3,822, which is the high attained on Dec 5.
Nasdaq loses bullish momentum
See also: Bond market pushes back on Trump's tariffs
Kelvin Wong, senior market analyst at Oanda, says the Nasdaq 100 has reversed its bullish momentum where at the start of this week, it was the sole major US benchmark stock index to print a fresh all-time high of 22,133 on 16 December.
“The ex-post release of the US Federal Reserve monetary policy's latest dot plot and Fed Chair Powell's press conference on Dec 18 have spooked the US stock market,” Wong says.
The Fed has indicated the prospect of fewer interest rate cuts in 2025 due to the risk of inflationary pressure resurgence and some Fed officials have taken into account the effects of the incoming Trump administration’s America First policy, he indicates.
See also: Charts continue to indicate corrective phase for STI and HSTECH; bear hug for S&P
Some technical indicators are point to some form of correction. These include the percentage of Nasdaq 100 component stocks trading above their respective 20-day moving averages plummeting to 9.9% as of Dec 19. Also, the Nasdaq 100 component stocks above their respective 50-day moving averages have declined to 33.7%, according to Wong.
Risk-free rates are near their highest level this year, rising to 4.59% before easing to 4.52% on Dec 20. With quarterly momentum and directional movement indicators looking strong, the 10-year US Treasury Yield may well break above 4.6%. Yield curve remains normalised, but it has clearly steepened.
