STI In Warning Phase

2010 is coming to a close. It has been a great year for the Singapore stock market with the index beginning the year at 2897. We are now above the 3000 level with the index slightly below its 50 day moving average. This puts the STI index in “Warning” phase.

The index is looking like it is forming the right shoulder of a head-and-shoulder top formation. The neckline for this pattern is between 3100 to 3120 levels.

The index has to move quickly above its 50 day moving average. Doing so will negate the head-and-shoulder pattern.

The index has been losing momentum and market participation has dwindled to a low due to the holiday season. Support is at 3100 to 3120 levels.