Straits Times Index Technical Outlook

The ‘gap-up’ that rose passed the 3030-40 immediate

resistance level last Friday is a positive sign. This cancels the

risk of further September choppiness down to as low as

2930. With that, we think the correction that started from

mid-August near 3100 ends at 2980 on September 6

for the STI to resume its climb to 3200 in 4Q.

Currently, STI re-tests the major correction trend R-R. The

first test in mid-August resulted in an 110pt pullback. This

time round, even if the STI is to stutter in the immediate

term near the 3100 immediate resistance, support at the

rising gap of 3035-3070 should hold. The daily MACD

signalled a positive crossover just last week. The McClellan

Oscillator, while rising again, currently reads 27.4, which has

more room to go before nearing the extreme overbought

level of 50.th. Look

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