Bad news for longterm buy and hold strategists. Longterm trendline has been broken to the downside signifying that the high of 2582.94 will probably remain for quite some time (say for one third of the bull market's duration from 4/9/98 805.04 to 3/1/00 2582.94 of about 16 months which works out to be approximately 5 odd months). In order words STI could be in for months long downtrend. Possible Elliot Wave Targets for the whole of this downtrend are about: (1) 0.33 retracement 1996(2582.94-(0.33*(2582.94-805.04))) , (2) 0.5 retracement 1693.99(2582.94-(0.5*(2582.94-805.04))) OR (3) 0.618 retracement 1484(2582.94-(0.618*(2582.94-805.04))). Fundamentals warrant such possible targets too in view of the rising interest rates environment. But question remains whether internet stocks will be following this downtrend throughout as internet stocks rely more on capital markets than bank loans to raise funds and world's internet users are probably increasing in accelerated rate.

However, downtrend could still be profitable for medium and short term players (long position players) as there might be one or two major technical rebounds and more minor technical rebounds. In Elliot Wave terms, there are three major waves in a major correction, i.e. Wave A, Wave B and Wave C. Now STI is probably still in Wave A (from 2592.94), once Wave A ends and Wave B starts, the possible extent of rise for Wave B could be 0.33 of Wave A (about 180 to 200 over points of rise), or 0.50 of Wave A (about 270 to 300 over points of rise) or may even test the high(2582.94) of previous bull.

Moving buy point for short term play using 2b formation is about 2106 i.e. if STI breaks 2106 to the upside, then this constitute a short term buy. However, cut loss point would be 2106 i.e. if STI dips back below 2106.

No rally is confirmed yet. Earlier quick technical rebound support level of 2075 is cancelled and the new moving quick technical rebound support level is about 1984.