Thursday, July 14, 2011

Singapore Straits Times Index: In Triangle Consolidation

Index futures to watch: Straits Times STI: In triangle consolidation
After surging to 3314 points on 9 Nov 10, the Straits Times Index (STI) corrected to as low as 2920 points on 18 Mar 11 amid the Japan’s tsunami earthquake but managed to recover to 3137 points after the 7 May general election.

In view of worries of China’s aggressive tightening policies and rapid economic slowdown in U.S. coupled with the ongoing debt crisis in Europe, the Straits Times Index (STI) again corrected to as low as 2999 points on 17 Jun before ending at 3089 points yesterday.

Overall, the Straits Times Index (STI) is likely to stuck in a triangle consolidation as it has continue to trade below the downtrend line resistance (near 3150 points), the 200-d (3141) and 50-d (3108) SMAs. Meanwhile, technical indicators remain lethargic with RSI below 50% whilst MACD and slow Stochastic are trending lower. These suggest that near term outlook remain negative.

Immediate resistance levels are situated around 3141-3172(upper Bollinger band) while supports are located near 2999-3025 (uptrend line support).

Daily Straits Times Index In Triangle Consolidation
Straits Times Index 15-07-2011

Source: HLIB Research

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