Morning look – 9th June 2009

Good morning everyone. Strange my post that I did yesterday didn’t seem to get through.

In general anyways you will remember I did mention 2400 as a major resistance to the upside. There were a few reasons. One of which is the double bottom breakout price target. On a longer term view, it is a 38.2% rally from the STI’s top back in 2007 and it’s recent bottom. This is significant, and I will put the year’s major resistance at the next level of 50%. Do I expect 2400 to breakout? Yes I do.. with a 2600 price target. But it needs to pull back and consolidate first. The pull back yesterday isn’t quite near the support I am looking at so I will expect a further pullback…say till around the 2260 level for now.

Indicators suggest a sideway-pullback momentum which makes trend trading quite tough as the price may be range bound. I will be looking to await buy signals again which suggests a possible next leg up. There will not be any shorting signals anytime soon.

Some profits should be taken off the table as close to 2400 as possible, leaving some for a possible quick breakout or a quick drop down. Either way profits are already in the pocket, and hence such a strategy will take into account all 3 possible scenarios. Up, down, and sideways.