SINGAPORE (Dec 6): The Straits Times Index has found support at the 3,177. This level is a little below the confluence of the 50- and 100-day moving averages at 3,180 to 3,187.
Chart 1: STI with moving averages and momentum
Quarterly momentum is approaching support that coincides with its equilibrium line. Volume is at a low, a sign that the STI is forming a temporary bottom.
Chart 2: Short term indicators
Short-term stochastics is approaching the low end of its range and should attempt a rebound from those levels. The 21-day RSI indicator is at its equilibrium line and is attempting to rebound. ADX has flattened and the DIs are turning neutral. These indicators point to a sideways movement during which the market is bottoming.
Support is already established at 3,177 and the index should be ready to rebound. The index peaked temporarily at 3,285, before retreating and this level is likely to provide resistance when prices rebound.
