Dear readers, the Singapore’s benchmark stocks index, the Straits Times Index (STI) is now overbought. The Straits Times Index (STI) now stood at 2,751.10. The STI ETF (ES3) which tracks the STI is also overbought at $2.795.
The most recent time the STI was overbought were on 2 Jan 2020 where the STI was at 3,252, after which the STI subsequently declined to a lowest of 2,233.48 on 23 Mar 2020. The other most recent time the STI was overbought was in end Oct 2019 to mid Nov 2020 where the STI was around 3,200 to 3,280. Thereafter, the STI consolidated around the 3,220 mark.
Looking at the past performance of the STI after being overbought and looking at the current stocks market backdrop where there are no positive catalysts, I am of the view that limited upside to the Straits Times Index (STI), the Straits Times Index (STI) constituent stocks and Singapore stocks is limited. On the converse, I think there is a likelihood that the Singapore stocks markets will correct soon, to the 2,500 support level first.
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