Week Ahead for STI...

Let's track the recent price movement for STI. Ever since the start of the bull run from March Low 2009, there are 2 instances where price falls below the long term moving average. So how does the recent one differ from these two, and what lesson can be learned from history. Let's begin!

End Jan 2010 to end Feb 2010
Price fluctuate around the Moving Average and refuse to go down. The MA is still sloping upwards, and price has to break heavy support to break-down.

Beginning May 2010 to end June 2010
For almost 2 months, price remains under the long term MA. Compared to Jan, this is more dreadful for the bulls as now the 50MA cuts below the 150MA, and 150MA starts becoming flat. This suggest buying power is weakening, and the signal that a new downwards trend begin will be the breakdown of end May low. It did not happen and towards end June, there is a piercing pattern that marks the start of another bull run.

Now
Price has been consolidating since last year Oct 2010 and towards the mid of Feb, it break down from the range. Unlike the correction in May, the 50MA still remains above the 150MA. The past few days has seen price consolidating in a tight range. This is critical as the break of 11th Feb low will mark a high possible start of a new downtrend. Do check for candle formation during the next few weeks for sign of continuation or reversal. Always note the downwards price projection level ~2950.

Of course, don't forget about News. The Singapore Budget 2011 announced on Friday might create some bias in the price movement. Let's watch and see how the big players feel about it. Their belief will reflect in price action.