FTSE STI closed 3,181.94 on 1st Dec 2010 rebounding from an intra-day low of 3,118 on 24th Nov 2010.
With reference to an analysis dated 24th Nov 2010 on the STI update channel, STI has completed 3 uptrend channels since March 2009 and appears to be forming the 4th uptrend channel. As indicated by the above chart, a possible scenario for the 4th channel with 24th Nov being the lowest of the 4th uptrend channel and with 1st Dec 2010 rebound, STI could be heading towards a level at 3,220 hitting the upper boundary of the channel and then pull back to test the 3rd lower boundary of the uptrend channel.
Normally, when STI is trading within the uptrend channel, it will establish higher low and higher high and this is what investors should look out for.
Based on past 3 uptrend channels statistic, each of the channel lasted at least 6 months and hence if STI is trying to form the 4th uptrend channel, the duration could be lasting for 6 months which terminates in May 2011.
