The STI at 2856 remains relatively resilient, in view of weakness by both the Dow and the Shanghai Composite Index. Although short-term indicators such as five-day stochastics are falling, and medium-term indicators such as quarterly momentum are lacklustre, the STI’s long-term indicators appear to be gradually strengthening, in particular, the important two-year indicator. Meanwhile, annual momentum has bounced off support and is recovering. The index is therefore unlikely to break below the May low of 2,650. InsteadIEW, it should stay within a trading range. The 50-day and 100-day moving averages are at 2,844 and 2,837 respectively. The game changer would be a convincing break above these levels, but that too is unlikely.
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