STI – Approaching this year’s high

Trend: Uptrend, 20ma up, Macd above 0

Support: 2960, 2890 (20 & 100ma close)

Resistance: 3020, 3120

Observations
Candlestick – Doji alike candle, slightly white
Histogram – 4r1g. Bearish divergence is seen.
RSI – Above 70%, overbought. No Bearish divergence is seen.
Stochastic –Bullish crossover is seen.
Bollinger Band – Closer to upper band.

Conclusion:
STI has been a strong performer since the correctional movement during the May period. Currently, it’s on its way towards the high of this year. Will it be able to break this year’s high or stay below this year’s high?
STI is currently exhibiting an obvious uptrend, but bearish divergence is only seen in the histogram. Looking closely, STI had broken previous high of 1960 level which indicates that next higher high should be seen. Higher high could be form at 3020 resistance level. Based on the indicators, both histogram and stochastic are triggering bullish signals. Hence, if there is a confirmation the next day, STI could reach 3020 resistance level. If 3020 resistance fails to hold, STI might seek 3120 level to form a higher high.
On the other hand, if the bullish signal fails, STI could be held at support level of 2960. But any further downside beyond 2960 level, it could be capped at 2890 level as 2890 level is a strong support level with multiple confluences of MA lines.
In conclusion, STI should have upside room to move currently but the key level is still 3020 level. If 3020 level is broken, upside could be up till 3120 level. But the probability of breaking 3020 level is still uncertain as there is bearish divergence signal seen in one of the indicator. Hence, once 3020 is broken, the upside will not be as doubtful anymore.

What to watch out for this week:
1) Confirmation of bullish signal.
2) Resistance at 3020 level.

Trading strategy to adapt right now:
- Long when there is confirmation of bullish signal.
- Reduce position when 3020 is reached.

*Disclaimer applies