STI closed 2,988.48 on 23rd April 2010, breaking out of the potential falling wedge formation and now have the following interesting points being observed.
1. STI has broken out of the falling wedge formation but lack of expansion in volume cannot conclude it is a firm falling wedge breakout. Hence need to monitor expansion in volume for next few trading sessions.
2. The theoretical falling wedge breakout zone is around the 2,880 - 2,943 region, so far STI touched the 2,943 level only; hence there is equal chance that 23rd April 2010 closed could be due to "overbought reaction" and STI could fall into the 2,880 - 2,943 zone in the next few trading sessions as the volume still in declining mode for past sessions.
3. RSI made higher low during the recent sell down while STI did a lower high. This could lead to a bullish divergence
4. Stochastic %K has cut up %D ( yet to cut up the smoothed %D ) and this could lead to a short-term bullish. Need to monitor %K cuts up smoothed %D and %D also cut up smoothed %D.
5. Long-term GMMA lines indicate uptrend with strength ( in expanded mode ) whereas the short-term GMMA lines exhibited slight compressed during the past days but with the 3d GMMA line poses to cut up 5d GMMA line, this could lead to expansion of the short-term GMMA lines and that is a bullish nature.
A confirm breakout of the falling wedge will resume the previous uptrend and breaking 3,040 level. A void falling wedge formation ie STI breaks down from the formation will create bearish scenario with 2,880 as the first level of support and 2,720 as the second level of support.
At the moment, STI is bias towards the upside more than downside as the long-term GMMA lines still indicating uptrend with trend.
