technical analysis shows key reversal

It is interesting when a stock provides a signal that can only be picked up by an indicator. The RSI (relative strength indicator) is often used to find when a stock is over brought or over sold.

Divergences can often be found to be the signal for a price movement change. If we look a the chart provided there is a divergence in this indicator for STI.

Note the W shape forming a higher low, yet the price itself formed a lower low. The other thing to note is today there was higher volume as it bounced off support to close above its open.

This is all positive however does need tomorrows price action to confirm. If tomorrows price is up, i would suspect that STI will break through resistance very soon.

A couple of days ago there was mention of a flag I am still not that convinced that it forms a flag however, if breaks up through that resistance will have a very similar effect.

If we use the theory of a flag then .06 would be the initial target for the break out. .02 being the lowest point and .04 being the highest.

Interestingly enough the highest recent spike was .06 on the 16th of April 09 so this is certainly achievable.



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Good luck with trading guys I think the time has come