FTSE STI closed 3,157.45 on 4th Oct 2010, hitting a new high since June 2008.
Technically, STI is currently doing a higher high since August 2010 but the RSI and Stochastic indicators are not suggesting that. Both the RSI and Stochastic indicators are either capped at resistance level or slowly achieving a lower high as the index moved up. This has potentially created a negative divergence and that is a bearish sign.
With the earning season starting in 2 weeks time, investors should start to be cautious as if the earnings of the companies were to miss analysts' expectation, given the recent run up, it has every good reason to correct down.
Tentatively, STI is being supported at the 3,040 level, a level which it tried to break last time and now has become a support. If 3,040 level could not provide good enough support, the next level would be around the 2,930 level.
Long term wise, the trend is still up but short to mid term, toppish sign is showing.
