STI held above 2744 on very narrow range for the past week. The charts show that there is no strong buying to support a strong rally, yet there is limited downside because of an oversold condition. The lower volume on the trading days below 2744 proves that the market is not inclined to dip further for the time being. Does that point to a rally then?
It does seem likely, and a short term buy trade could be profitable. As usual, i think the key is watching how the rally unfolds and to take quick profits on possible signs of weakness.
The long term buy signal will come in once the market edges closer to the moving averages.
