STI closed 2,880.48 on 10th May 2010, rebound after last week of drop when Europe announced plan to defend the sliding Euro and European debt issue with a war chest of billion Euro. The followings were observed with the rebound
1. Stochastic & RSI cutting up indicating short-term rebound
2. Short-term GMMA lines in particular the 3d is trying to cut up the 5d
3. Long-term GMMA lines slight compressed but not fully compressed indicating long-term trend still not negated
4. DI pair though negatively spaced but DI+ is trying to move up while DI- is coming down
The rebound so far has not negate the trend for STI. For STI to negate the bearish trend and resume uptrend, it must cross the 2,940 level. A breakdown at 2,750 will see STI potentially drop to 2,700 then 2,580 level. At the moment, STI appeared to be in range bound between 2,820 - 2,902. Market could consolidate in this range for weeks or months before major movement kick in.
For short-term traders, the range bound could be a good trading opportunity; buy near support and wait for rebound.
