Technically, there posed to be a short-term uptrend on STI. The DI+ is moving up to meet the DI-, narrowing the spread and ADX is moving towards the 40 level. If DI+ is able to crossover DI- and ADX is above 40, this will signal a strong uptrend for the market. MACD signal showing convergence sign and the MACD histogram is close to move up to the positive region. RSI moved up above the 30% region indicating a technical rebound from oversold position in short-term. Stochastic has just cut up and showing sign of moving up from oversold position. An immediate target for short-term rally would be to cover the gap with resistance tag at aroun the 2770 level. If the uptrend is able to sustain, the next target would be the 50d EMA level at 2856 level. The immediate support for STI at the moment will be the 2680 level and failing to hold, a potential correction target would be the 2600 level.

For the coming week, there will be several mixed signals for the direction of the STI. Firstly, after market closed on Friday, Singapore government announced a 6% cut of development charges for residential developments. This would be a potentially good news for property developers like CityDev, Capitaland, Kepland, SC Global and etc. Hence, there might be an uptrend for property counters for the coming week. The Hurricane Gustav is threatening to hit the refineries in the Gulf of Mexico and oil companies are shutting down operation there, this will jack up the crude oil price possible above the US$120/barrel level, which is bad news for equity markets. Over the weekend, US President George Bush in a Labor Day weekend message said that said recent signs should give Americans hope on economy and this might be enough to offset the potential rising crude oil price for the coming week. The direction of STI market for the coming week will be as usual tracking other global markets for lead.