Another week of consolidation for Asian markets. The STI, which still seems to be rather weak, rebounded off the low of 2706 before declining to 2750 on Thursday. With yesterday's bounce up, STI is much less oversold with a RSI reading of 30.
STI is still hovering around the 100 day SMA of 2753. Another possibility is for STI to retrace 50% to 61.8% of the recent move down over the next few weeks. 50% retracement is at 2825 while 61.8% retracement is at 2855. However I expect the STI to be consolidating in the 2720-2770 region for a few days. if 2780 is broken convincingly, we could see more upside. I do not expect the 2680-2700 level to be broken any time soon as there is some strong support in the area.
Meanwhile, the Hang Seng broke briefly below the 20000 level before rebounding strongly to a high of 20780. The SSE also hit a low of 2890 before rebounding strongly to its close of 2995 on Thursday.
In the US, the Dow recorded its best 2-day gain in 3 months- just a technical rebound or resumption of a bullish trend?
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