Since a 4% dropped in the week 7th - 11th Feb 2011, STI has been in range bound mode with upside capped at 3,120 ( the previous support for hitting an intra-day high of 3,313 ) and immediate support at 3,040 ( a double top it tried to break in April, August 2010 ). Should the 3,040 support gives way, the next support would be around the 2,930 region ( trying to break in Jan 2010 and formed a support in Aug 2010 ).
A drop from 3,313 to 2,930 would cause STI to correct 11.56%, a magnitude that was seen last year when global markets corrected due to the fear of Greece issue.
Thus far, Singapore economy has not shown any sign of cracking apart from rising inflation risk and chances of correcting more than 11.56% is relatively slim at the moment.
STI might just consolidate from 2,930 to 3,120 before the next move. The consolidation phase could be divided into 2 regions ( 2,930 - 3,040 ) and ( 3,040 - 3,120 ).
Short-term investors could trade according to these 2 regions as they range bound.
Long-term investors could slowly accumulate along these 2 regions.
