Above is a daily chart of the STI. We are continuing to chop along. But I wish to draw your attention to my observations. Strong support is seen at 3251. This level has been tested twice and has held. A close below that level may signal a sell off to about 3200. For a confirmed continuation of the uptrend, the STI needs a close above 3320. But again, i say any pull back is a good opportunity to buy.

STI - sideways and looking tired

Here we have the daily chart of the STI. February has been a choppy month so far. Support at the 21 period moving average is still holding and the major trend is still up. But my main concern is the falling MACD and the inability of the STI to hold on to any gains. Resistance is at 3311 and support is at 3273. If 3273 is broken, next support is at 3250. Since longer term trend is up, i would suggest buying blue chips on corrections.

STI - momentum is on a downtrend

above is a daily chart of the STI. The STI has had a strong run up since Nov 2012, peaking at 3320 on 4 Feb 2013. However, after that, the STI has not been able to test that level again. The runup now looks tired, and we can see that the MACD peaked sometime in early Jan 2013 and made a lower high when the STI made a new high. This is bearish divergence and my guess is that the STI will come under selling pressure every time it attempts to rally. The 21-day moving average provided some support during the last correction and it looks like the STI will test that support around 3250-3260 if the STI consolidates further. Major trend is still up, but it looks like the STI needs to shed some points before buyers come in again.

STI - key resistance reached

Above is a weekly chart of the STI stretching all the way back to 2007. We had a major market crash in july 2007, which bottomed out in Oct 2008 and Mar 2009. We have been in an uptrend since then, which peaked in Oct 2010, then a correction until late September 2011. Since then, we have been chopping around and from Jul 2012 the upward momentum started to get stronger. And since we have been focusing on the downside, with all the talk about the weak global economy, we have failed to see that we have hit the previous high in Oct 2010. At this juncture, i see that the upward momentum is very strong. In fact, much stronger than the time in 2010 when the STI hit a high of 3314. So i think that this rally still has much going for it, and i would advise going long on any pull back. Next resistance levels are at 3600 and 3900.