STI limited upside

Trend: Uptrend, 20ma up, MacD above 0

Support: 2974 – 2985 (rising window), 2950 (20ma)

Resistance: 3034, 3122

Observations:
Candlestick – 2 black candles already seen forming a new high.
Histogram – Just turned R after 2 G. Bearish divergence is seen.
RSI – Now close to 70%. Bearish divergence is seen.
Stochastic – Yet to form a Bearish crossover.
Bollinger Band – Touched upper band and turning down.

Conclusion:
STI broke out of 3000 level with a fanfare but it quickly lost its momentum and retraced soon after it hit 3035 level. It is normal for an uptrend to form a lower high after a breakout. But it is quite worrying to note that bearish divergence is seen in MacD histo and RSI. This indicated that the current uptrend is getting weaker and might have a change in trend. Hence, the recent higher low that is being formed in STI will be a key level to watch out for in order to determine whether STI have more room on the upside. If STI is to retrace to 2950 level and holds, it could mean that STI might start to form a sideway trend. If STI breaks 2950 level, a lower low will be formed and it could means that STI is going downtrend.
Since we are now at the crossroad junction, it is important for us to adapt a cautious approach to the market.
My personal strategy will be to reduce my current long positions at resistance levels. If I am looking to long, I would avoid index component counters and counters that exhibit bearish divergence like the index. If it is impossible to reduce my current positions if it did not reach my target, I might want to take some risk to enter short positions on downtrend counters to “hedge” my long positions.
Do trade with caution and start indentifying where is your stops or trailing stops.

*Disclaimer applies