STI analysis

Evening traders/investors,

I have a few charts on the STI today. In my last post, i was bearish on the local bourse, bearing in mind that i am still a firm believer that we are in a long-term uptrend. Since then, the STI has gone up a little, and recently has been trading in the 2700s. On the chart, i have drawn a channel. The bottom base of the channel being our nearest support line for now. Indicators are looking bullish for the week ahead and so i shall be expecting the STI to edge up. Last Friday, the indices in the States posted good gains, so we should probably see the STI get above 2800.

Finally, i have used fibonacci retracement studies and have found something interesting looking. Taking the decade high and the low made in ’08 and ’09, we have the vital levels that you can see in the chart below. Interestingly, the “santa claus rally” went all the way up to the 61.8% level before getting rejected. Where did the STI find support? At the 50% level! Looking at the channel i have drawn, i believe the STI should remain within the range of 2700 to 2900 for the weeks ahead.

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