STI closed 2,991.68 on 27th April 2010, pulling back performing backtesting of the falling wedge breakout point. Short-term wise can see some downside bias as Stochastic %K about the cut down %D with RSI also trending down.
Things to look out for :-
1. The support zone between 2,880 - 2,945 should not be broken
2. The backtesting should rebound 2,920 and cannot drop below that
3. Volume expansion when market rebound after backtesting
At the same time, a mini head-shoulder formation could be formed with the neckline around the 2,943 region and if that is broken down, this will create a bearish view with a estimated downside target around the 2,850. At 2,850, this will break the support zone between 2,880 - 2,945 and potentially compress the long-term GMMA lines.
Presently, the long-term GMMA lines still in uptrend with strength and if STI falls into the lower part of the support zone, will have to monitor closely on the status of the long-term GMMA lines.
A successful backtesting and rebound with volume will validate the falling wedge formation breakout with estimated target 3,150.
A breakdown of the mini head-shoulder at neckline 2,943 will have a potential downside of 2,850. At 2,850 this will pierce through the support zone at 2,880 - 2,945 and potentially creating bearishness in the long-term GMMA lines voiding the long-term uptrend.
With US markets fell average 2% yesterday night due to the Greece's debt issue, will have to monitor carefully the support level at the moment.
