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Sunday, February 27, 2011

Where does STI heading ?

Now that the Point and Figure target at 2,975 was met. It is no longer so straight forward as before to tell which way the market is heading. There are conflicting technical signals such as RSI is in oversold region suggesting selling may have exhausted. But on the other hand, prices are still trading below the 200 MA and Parabolic SAR is still in sell phase in the monthly chart.

What we really need to do is to watch how prices are reacting to the resistance at 3,040. This level is currently confluence with the 200 MA. A decisive break above this level may signal the end of correction. Whereas, a U-Turn from here could mean market may retest 3,000, 2,975 and then 2920.