SINGAPORE (July 20): Here is the STI daily chart for our technical analysis this week.
STI daily (3,297)
The STI rebounded by around 20 points over the past five sessions, but is up more than 100 points over the past two weeks. At present, this looks like the much anticipated relief rally. Quarterly momentum has only just rebounded off a one-year low. A minor positive divergence between momentum and index. The rebound is likely to meet with initial resistance at 3,375, at the declining 50-day moving average.
Short-term indicators have rebonded sharply, with stochastics approaching a relatively high level, and 21-day RSI at 46, after testing a low of 39.
Indicators have the potential to recover further, such that RSI gets marginally above its equilibrium line, and quarterly momentum is able to move within a few points of its equilibrium line. These levels would coincide with a move to 3,375.
