The STI finished its correction with three subwaves to form Wave ii (brown), retracing by the Fibonacci ratio of 50%, and has gone up since. However it is still too early to celebrate. As stated in last week’s blog we have to wait till the STI goes above the top of Wave b (brown) at 3341 (blue horizontal line) to confirm the uptrend.
If you look at the centre of the chart you will see that the blue horizontal line provided support to the STI at three points. A support line can become a resistance line, now that the STI is below it. So it is important that the STI gets through 3341 and be well above it.
I have drawn the base channel which links the extremes of Waves i and ii (brown) with blue parallel lines. The STI has to go above the top blue line to confirm Wave iii action. This will more or less coincide with the top of Wave b (brown) or may need to be higher.
Keeping fingers crossed.