The FSSTI index has rebounded from the low in Mar 20 but the outlook is still negative as it is still trading below the cloud. It nearly hit the pennant target (around 2,950) after breaking out of the pennant pattern since May 20, but the base line (blue line) has resisted the index’s rally.
In terms of momentum indicators, the RSI is rising towards its neutral level, and there is a bullish MACD crossover. As long as the low of 2,490 is not violated, we could see the index forming higher highs and higher lows, and testing the gap resistance at 2,960.
Investors could accumulate, buy on dips and sell on rally when the index moves towards the gap resistance at 2,960.
Support: 2,570 / 2,490
Resistance: 2,890 / 2,960
Wong Shueh Ting, CFTe