The Straits Times Index continued to rally in the week of Mar 14-18 ending the week at 3,330. At this level the STI is back above its moving averages, including the 50-day moving average which is currently at 3,299. The March 8 low of 3,148 looks likely to be the trough for the next few months.
In the immediate term, the 182-point rise in six trading sessions has caused short term indicators to move to the top end of their range. Hence a consolidation could materialise shortly. Any retreat or easing in the index is likely to find initial support at the 50-day moving average. Since quarterly momentum rebounded off its equilibrium line, it should continue to underpin the STI and enable it to test a resistance at 3,441, which was the Feb 17 high.
Overall, the STI is likely to continue to gain strength against both the MSCI Singapore Index, and the Hang Seng Index (currently at 21,412). The HSI which has reached a rebound high, could well retreat in the week of Mar 21-25, back towards 20,000.
