FTSE STI closed 2,860.31 on 5th May 2010. STI has already broken down from the mini head&shoulder formation and fell through the support zone 1 of 2,880 - 2,945. The followings were observed :-
1. Volume expansion on the down
2. Support zone 1 broken
3. DI pair negatively spaced and ADX signal though below 20 but appears to be moving up
4. Short-term GMMA lines expand trending down
5. Long-term GMMA still in expand mode maintaining the uptrend
Short-term wise, bias towards downtrend and with support zone 1 broken down, potentially STI could continue to pull back to support zone 2 at 2,730 - 2,820. The lower boundary of support zone 2 would signal STI retracted about 10% from recent peak.
Things to monitor :-
1. ADX signal line direction in moving up towards 40 and this could signal strengthening of the downtrend
2. Long-term GMMA lines do not get into compression mode
3. Volume must decline to signal the selling easing
