I have shared with you on stars gazing and on hammers. Today i share with you the neckline and how to do a projection if the neckline is 'broken'.
The neckline of STI is around 2,980. If the neckline is breached, it usually means an ugly show as you will lose the pants as well.
The STI looks like forming a double top formation. To project the downside, simple use 2980 (neckline) less the sum of [3,088 (around the high of the double top) – 2,980 (neckline)] = 2,872 (downside projection target)
Trading is a probability game and this is my current view on STI should the neckline be breached. If it comes, it is usually fast and furious.
I will usually not trade unless i am either shorting or until i see clearer buy signals. Happy trading.