STI $Straits Times Index(STI.SI)$ Technical Analysis (Weekly Chart)
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The Straits Times Index (STI) continues to hold its long-term upslope trendline, which has acted as dynamic support since the 2020 lows.
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Recently, the index rebounded sharply from the historical support zone around 3,400, a level that previously capped price in 2021–2022 and is now acting as a key demand area.
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A visible gap between 3,750 and 3,800 has formed after the strong rally, with price now pushing toward the lower boundary of the gap.
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After rebounding sharply from this zone, price has moved back up and is now approaching a gap area between 3,750 and 3,800. This gap serves as a resistance zone, as gaps are often seen as price inefficiencies left behind by rapid moves.
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Such areas can act as resistance due to supply overhang, where traders who were caught in the prior drop may look to exit at breakeven, creating selling pressure.
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The current price action shows hesitation near the lower edge of the gap, suggesting resistance is being tested.
Quick Note on Gaps
A price gap occurs when an asset opens significantly above or below its previous close. Gaps are often filled, meaning price tends to revisit that zone—but not always immediately. Whether a gap fills depends on momentum, trend strength, and broader sentiment.
DLC Strategy for Short-Term STI Trading
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If the Straits Times Index (STI) pulls back from the 3,750–3,800 resistance area, short DLCs (e.g $STI 5xShortSG250529(CYGW.SI)$ ) may benefit from the short-term downside movement.
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On the other hand, if the STI breaks above the gap and holds above 3,800, long DLCs (e.g. $STI 7xLongSG250529(CWHW.SI)$ may increase in value in line with the upward momentum.
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