Been alerted on a possible STI Descending Triangle breakdown at 2,720 on 23rd Sept 2011. From the look of the daily chart it seemed so as it fell and closed below the base of 2,720 with high volume. However, from a classical breakdown point of view, the candlestick should not be white. A classical breakdown will have STI closing value lower than opening value for that day which result in a black candlestick. Should on 26th Sept 2011, a white candlestick forming and able to close at or above 2,740 ( above the midpoint of the black candlestick on 22nd Sept 2011), a Morning Star formation will be formed which is potentially bullish as contrast to the bearish Descending Triangle.
For the same period from Aug 2011 till 23rd Sept 2011 by looking at the weekly chart, there is no sign of Descending Triangle been developed but instead it appears to be forming a Falling Wedge pattern. Falling Wedge pattern in general is bullish in nature. Should the coming week ( 26th - 30th Sept 2011 ), a candlestick forms within the black candlestick ( week 19th - 23rd Sept 2011 ), it will develop into a Bullish Harami formation which should be a sign of reversal too.
Hence, it is too early to conclude that STI has been broken down from Descending Triangle formation as of 23rd Sept 2011.
