Technical Analysis on STI – 18th Aug 2009

Morning folks. Back a little late so I will do a very quick look at the markets.

The SSE rebounded strongly today, with HSI in tow as well. Since both are up, the STI took lead for a tech rebound. Question now is, is the retracement over, or is this just a tech rebound or short covering?

There are a few areas to look at. First, the 20MA resistance which is where 2580 is now. The next is gap covering up to 2610. This line also coincides with the mini downtrend line and it will offer some resistance. A rebound to those levels will be closely watched. If it can break out, then good, 2650 will come into play. If it doesn’t it will confirm yet another lower high (2nd one and confirmation of the first lower high). This will not be good for upside inthe near term.

One thing we can say is, the support at 2540 held.

Across the board I saw retailers buying. Credit suisse also bought, and Citibank also did some buying. Are they scooping up some bargains?

All will be revealed, with the first test at 20MA, come up real shortly.  Perhaps as close as tomorrow. My key resistance is at 2610. With 2540 as support.