Current Trend for the Straits Time Index (STI)

What a wild week it has been for the STI as relentless selling has caused the index to breach the 3000 psychological level. This was on the back of the heavy selling in the US indices which has been rallying up without a meaningful correction for an extended period of time. STI however has lagged the general market on the upswing and suffered on the downside. Is the selling over? Can we start to look to go long? I generally feel that the selling has been a tad overdone and the index is at the support of 2950 based on the weekly chart below.

After such a parabolic move we do expect the index to stabilize at the 2950 support and would trade within a tight range. There might be a correction rally to test 3060 level and if the …