SINGAPORE (Oct 12): Here are two charts for our technical analysis this week:
STI could bounce, then resume downtrend
The Straits Times Index’s decline during Oct 9-11 took the index below a twice tested support at the 3,103 to 3,109 range. Short term stochastics turned down from the top end of its range as 21-day RSI tested 30, an oversold low. ADX is rising and the DIs remain negatively placed. In addition, quarterly momentum is falling.
In the short term, the STI is should rebound, with resistance appearing at the breakdown level at 3,109. When the downtrend resumes, the next support is at 2,900.
Annual momentum continues to fall, an indication that the STI’s downtrend has yet to run its course.
DBS Group Holdings ($24.42) should break below neckline support
Prices appear set to break below support at $24.34. A breakdown would cause a significant downside of around $20. The 50-, 100- and 200-day moving averages are coalescing above prices and set to turn negative. This would place downward pressure and cause a breakdown. Quarterly momentum is facing resistance and is likely to retreat, lending weight to the likelihood of a breakdown.
Short term stochastics is at the top end of its range and is beginning to turn down while 21-day RSI has turned down. ADX is falling, and the DIs appear poised for a negative cross. As these indicators weaken, the trend of annual momentum continues to be downwards. This indicator looks set to break below its equilibrium line.
Support has been estabished at the Sept 11 of 3,102, and resistance has now been established at 3,267.
