The ST outlook remains bullish.

10 July 2012 (Extracted from Macquarie Singapore Daily Newsletter) Singapore

The Straits Times index declined by 1.66% on Monday. After the closing bell, 90% of the index constituents were above their 20D MA (vs 97% last Friday), and 87% of the shares were above their 50D MA (vs 93%). From a chartist standpoint, the index corrected on the downside yesterday, as the RSI (14) is reversing down from its "overbought" area at 70%. Nevertheless, the ST bias is still bullish, as the index remains well supported by its rising 20-day simple moving average, which has just crossed above the 50-day one (a bullish signal). To sum up, as long as the key support at 2845 holds on the downside, expect a limited consolidation before a new bounce to 3030 and 3110 in extension.