Monday 19 January 2009

STI Technical Analysis by DB

After a bullish breakout from a symmetrical triangle pattern, the STI has corrected back below the breakout area last week and closed below horizontal support at 1,711 on Thursday. Further downside towards 1,638 seems likely as long as the index does not recapture last week’s high at 1,807 decisively. A break below 1,638 could pave the way down towards the trough at 1,474. As long as prices remain below 1,807, short-term traders may thus consider taking short-positions, especially on a close below 1,638. Aggressive traders should look for a close above 1,807 before taking new long-positions.

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