STI is not able to cross 1,780. As expected, the index succumbed to profit-taking, especially after the nifty 20.8% gains since the STI rebounded from 1455 low in early March. The index has fallen to the 10-month downtrend resistance-turned-support line at around 1745 (dropping by around 5 points daily).
Should this support give way, the next support is at 1725 and then 1702 (100-day moving average). In any case, we feel that a near-term pullback is healthy and should help sustain the current technical rally.
As before, as long as 1455-1474 is protected, the index could still be heading towards 1960 in the coming weeks. Initial resistance at 1780, ahead of 1800.
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