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STI Weekly Update (18/01/14)
Perspective | 20 January 2014
By: Jeff Sun
Articles (25) Profile

During the week, the Straits Times Index (STI) stagnated with opening at 3,150 and closed at 3,147. The reduction of trading volume in the Singapore market for the past three months has highlighted that major funds have not returned to our market. Investors are also staying on the sideline, awaiting for the establishment of a clear trending market.

The immediate support for STI at 3,116 level has supported the index well during the week. This support level has been highlighted during my last posting on 13/1/14. The support level has been deemed crucial as it establishes the first point of higher low as highlighted in the chart. With the STI currently also supported by the 20-Day Moving Average (MA), this signifies a potential formation of an uptrend channel for the index. Immediate resistance to watch is at 3,189 level.

On the weekly chart, the STI is still exhibiting a bullish inverse head and shoulders pattern. The confirmation of the chart pattern breakout would require STI to break above the 3,215 level with high volume. It is more likely for such a level to be attained during the month February, as we are still about 100 points away from the mentioned level. The projected target of this breakout will be near the 2013 high’s of 3,390 level.

Jeff Sun, a self taught market observer and owner of Singapore Stocks Trading.

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