STI is converging into the tip of the Ascending triangle, usually a bullish pattern. However, i believe traders should exercise caution as the momentum has been diverging and the volume has been dipping. The index has also started to make lower highs which is indicative of a possible trend reversal.
The US data released recently suggest a recovery in place and the firming up of the Greek bailout plan has boosted sentiments. However the news should be priced in by now and the index is ripe for profit taking. It is too early to take a strong stand in either direction for the medium term, but for the short term the way now, is
down. Look for the 2905 support. A good basing pattern is the signal to pick up some good blue chips for the next leg up.
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STI is converging into the tip of the Ascending triangle, usually a bullish pattern. However, i believe traders should exercise caution as the momentum has been diverging and the volume has been dipping. The index has also started to make lower highs which is indicative of a possible trend reversal.
The US data released recently suggest a recovery in place and the firming up of the Greek bailout plan has boosted sentiments. However the news should be priced in by now and the index is ripe for profit taking. It is too early to take a strong stand in either direction for the medium term, but for the short term the way now, is down. Look for the 2905 support. A good basing pattern is the signal to pick up some good blue chips for the next leg up.
