STI dropped out of the uptrend channel after breaking down at 3,182 on 14th Dec 2010 and since then pull back to re-test the support at 3,120 on 20th Dec 2010. A rebound was followed to yesterday closing of 3,207.91. In the process, STI appears to be trying to form a cup-handle formation with the cup being defined. Will it formed a traditional cup-handle formation in which it might pull back after hitting the rim of the cup at 3,208 to form the handle or will it takes the form of a China cup in which there is no handle formation.
A potential cup-handle or China cup formation breakout with the rim at 3,208 and base of the cup at 3,129 will have a target of around 3,287.
The much talk about head-shoulder formation though didn't materialize as no breakdown occurred at the neckline of 3,120, current moving up has slowly negate the effect of the head-shoulder formation.
