STI closed with a gain of 54 points on Friday. For the week, the index was down 144 points. The carnage started due to a downside of US debt. Traders used it as an excuse to take money off the table. The index went decisively below its 200 day moving average, moving the index into bearish phase.
Looking at the daily chart, the market is still in bearish trend. Although there may be a rebound in the short term, the 50 day and 200 day moving average will serve as resistance level. Usually when market drops with such big volume, it will not be able to move above its 50 day and 200 day moving average during the first test. So expect the market to move down again after the rebound loses its momentum.
