Dear readers, the Singapore Straits Times Index (STI) continued its bullish momentum this week, breaking well beyond the psychological 4,000-point mark to close at 4,239.83 on 8 August 2025. This latest milestone reflects strong investor confidence, supported by recent corporate earnings reports and a positive global market backdrop.
However, while the index itself has been climbing, the individual components tell a more mixed story. Technical indicators, particularly the Relative Strength Index (RSI), reveal that some STI stocks are in overbought territory, some are oversold, and many remain in the neutral zone.
What is RSI and Why It Matters
The RSI is a momentum oscillator that measures the speed and change of price movements on a scale of 0 to 100:
- Above 70 → Overbought (potential short-term pullback risk)
- Below 30 → Oversold (potential rebound opportunity)
- Between 30–70 → Neutral (balanced trading momentum)
RSI is widely used by traders to identify potential turning points, but it’s best used in combination with fundamental analysis.
STI RSI Snapshot – 8 Aug 2025
Based on the latest readings, here’s the current breakdown:
- Overbought Stocks:
DBS Group Holdings, Dairy Farm International, Keppel Limited, Venture Corporation, Yangzijiang Shipbuilding.
These counters have rallied strongly, with momentum fuelled by solid earnings, business expansion, or sector-wide optimism. - Borderline Oversold:
Sembcorp Industries – Recent pullbacks have brought the stock close to oversold territory, potentially setting up a rebound if sentiment shifts. - Oversold:
Singapore Airlines (SIA) – SIA earnings were down 58.8% y-o-y for 1QFY2026 to $186 mil from lower interest income, pushing the RSI into oversold territory.
Investor Takeaways
- Overbought stocks may still offer upside if earnings momentum continues, but traders should be cautious of short-term pullbacks.
- Oversold stocks can present value opportunities, but it’s crucial to verify whether the weakness is due to temporary factors or deeper business challenges.
- Neutral RSI stocks offer more balanced entry points, particularly for long-term investors looking for gradual accumulation.
Final Word
The STI’s climb to 4,239.83 is a strong signal of market resilience, but the diversity in RSI readings suggests that selective investing is key. Whether you’re hunting for momentum plays or bargain entries, blending technical signals with solid fundamentals will help you navigate the market’s next moves.