SINGAPORE (Mar 16): The Straits Times Index drifted lower during the week and is now supported by the confluence of the 50- and 200-day moving averages at 3,204 and 3,192 respectively. A break below this level is unlikely as down-momentum is weak. This is evidenced by falling ADX which is currently at 15. The DIs are negatively placed. Short term stochastics is approaching the low end of its range.
Quarterly momentum rebounded off its equilibrium line and this could provide a near term fillip. However the range is likely to be narrow between 3,190 and 3,286. The 50- and 100-day moving average remain positively placed.
Support is at the breakout level of 3,190. The break above 3,190 indicates a target for 3,420, and this remains valid for the time being. Only a break below 3.190 indicates the upside is no longer valid.
QAF strengthens further
Prices broke out of a resistance and the 200-day moving average at 75 cents accompanied by volume expansion. The breakout indicates a target of 95-96 cents.
In the immediate term, there could be a temporary retreat given that quarterly momentum is at a two- year high. Prices had been in a two year downtrend, bottoming late last year at 56 cents. Any retreat should be supported at 75 cents below which the upside is no longer valid.
