Ideally, support for the Straits Times Index is at the 3,180 to 3,183, around the 200-day moving average. The index ended the week of Feb 19-23 at 3,184. The 50- and 200-day moving averages have turned up after making a neutral to positive cross in early February. These slow-moving indicators should provide support areas for the index as it digests the gains made since the start of the year of the Dragon.
On Feb 20-21, the STI tested intra-day highs of 3,244 and 3,247, which is in the vicinity of a resistance area identified as 3,240 to 3,250. In the near term, this level may continue to pose resistance. Hence, while the main upmove of the market remains intact, a sideways ranging market, moving between 3,180 and 3,250 may persist.
Short-term RSI has eased from a mildly overbought level towards neutral levels and may continue to retreat, albeit modestly. Quarterly momentum and directional movement indicators remain intact.
Elsewhere, yields on the 10-year US Treasuries (10YT) appear increasingly likely to break above a resistance area that is represented by the confluence of resistance 4.34% and the 200-day moving average at 4.32%. Such a move may cause the S&P 500 and the Nasdaq indices, which made new all-time highs this month to retreat. The S&P 500 moved above 5,000 on Feb 9 and has remained above this level although this index could ease below 5,000.
