STI

STI: Maybank-KE notes that the STI’s rebound from its Oct ‘08 low of 1,474 took the form of an irregular Elliott Wave 3-3-5 flat move to a high of 3,465 (May ‘13), ending with a bearish engulfing pattern.

The index’s next key swings were 3,065 (low), 3,278 (high), 2,991 (low) and 3,260 (high), and price weakness since Sep ‘13 caused the index to fall towards its swing low of 2,953 (4 Feb ‘14).

After reaching a new high recent high of 3,550, the index has tumbled since.

Going forward, the house guides that support areas may be weaker, with expected heavy profit-taking at key resistances levels. All its weekly chart indicators are bearish, coupled with very obvious bearish divergence.

The 18 and 40 simple moving averages are depicting a downtrend for its daily and weekly charts. Meanwhile, the STI’s monthly charts depict an ending uptrend.

Maybank-KE is recommending investors to take profit on any rallies for the STI, adding that a potential test of the stipulated support areas will emerge.

Maybank-KE tips key support levels at 3,267 and 3,149 and key resistance levels at 3,317 and 3,490.