Market Commentary
STI hits 1,779 on Friday and reversed from there. 1,779 was the last significant high recorded on 1/29. The point of reversal confluence with a downtrend trendline resistance in the weekly chart.
Major supports based on Fibonacci retracement ratio are marked in the chart below. Additionally, 1,680 is Elliot Wave 'sub-wave 3' target which could be a good support level. The upside volume over the past two weeks are much higher than the downside volume. The odds may happen, STI may decide to break the 1,779 resistance & the weekly trendline decisively ( in TA, 'decisively' means 3% ). In that case, the next upside target will be 1,900.
Personally, I prefer STI to take a respite before hitting higher. The last three weeks' rally was too sharp ressembling the rally in Aug ~ Oct 2007. Usually, uptrend with 60 degree gradient is not sustainable and often resort into a more moderate 45 degree trendline.
Major supports based on Fibonacci retracement ratio are marked in the chart below. Additionally, 1,680 is Elliot Wave 'sub-wave 3' target which could be a good support level. The upside volume over the past two weeks are much higher than the downside volume. The odds may happen, STI may decide to break the 1,779 resistance & the weekly trendline decisively ( in TA, 'decisively' means 3% ). In that case, the next upside target will be 1,900.
Personally, I prefer STI to take a respite before hitting higher. The last three weeks' rally was too sharp ressembling the rally in Aug ~ Oct 2007. Usually, uptrend with 60 degree gradient is not sustainable and often resort into a more moderate 45 degree trendline.
There are plenty of counters that have turned bullish but I think I will wait for the market to unfold before committing on new positions.....
PS: Oscillators are not very useful during trend transition with major market move like this. Overbought could remain overbought for a long time. If you are holding long position, try not to liquidate it just because oscillator shows overbought.
Labels: Market Direction
posted by Market Wizards @ March 29, 2009
Comments: 0
