A review of the STI

I was a bit disappointed when the DOW went down by 122 points on Friday. But, on a positive note, it was up for the week and has been up two weeks in a row - something it hasn't done for almost a year.

For the STI, what do we see? From the monthly chart, it appears that support at 1472 is pretty firm; the STI did go below that level in early March, but quickly bounced off. So at this point, it looks unlikely that we will head towards the 1200 level reached in 2003 unless the STI manages to close below 1472 on a monthly chart.

Let's have a look at the weekly chart:



STI's movement has been sideways and largely range bound between resistance of 1926 and support of 1472. Looking at the momentum of the STI, it does look likely that the STI will trade towards 1700 within the next 2-4 weeks. If it fails to close above 1700, it is likely to turn down and retest the 1570 level again. If it does manage to close above 1700, the next hurdle would be 1926. A close above 1926 would be very significant and i believe would signal the end of the bear market.