SINGAPORE (May 11): The Straits Times index retreated 119 points or 3.5% over the past five sessions, taking it below the 50-day moving average currently at 3,277.
At the same time, quarterly momentum continues to fall.
Although quarterly momentum is above its main support at its equilibrium line, its chart pattern is weak and has the potential to break below this support.
Elsewhere, both short term stochastics and 21-day RSI are in sharp retreat. ADX has turned down, and the DIs have turned negative
Annual momentum moved sideways and may continue to meander sideways, stuck below its own equilibrium line.
Immediate support is at the rising 100-day moving average at 3,220. Immediate resistance is likely to appear at 3,290.
With the upward momentum broken, the STI is likely to move within a range for the next few sessions.
Singapore Airlines may drift lower
Medium-term indicators are weak. Quarterly momentum has broken below a four-times tested support at the equilibrium line.
The 21-day RSI is falling. In addition, prices are easing below the 50-, 100- and 200-day moving averages, with the 50- and 100-day moving averages forming a negative cross.
Only short term stochastics is turning up from the low end of its range, and that may keep prices above support at $9.40.
Prices need to stay above this level as a breakdown would indicate a downside target.
