STI time for correction?

Looks like we are in the last leg of this 3month rally.... few cents stocks are in play. Drawing this analogy to the top volume market as it stands, none of the top 10 stocks is above 10cts, none of the top15 stocks is above 15cts and only 1 of the top 20 stocks is above 20cts. Having noticed that, I think it's not that difficult to figure whether a boom or a crash is coming.

On the technical front, the STI has posted three dark candlesticks (closing below opening) at the upper Bollinger Band, which suggests of market fatigue.

This is not surprising as the technical indicators show that the market is extremely overbought and is poised to stage a correction; the RSI has just turned lower inside the overbought region, while the stochastic has staged a negative crossover inside the overbought region.

The MACD indicator (although remains pretty bullish) has just shown a negative divergence to the price action, which again reinforces the market fatigue angle.

As such, we are not ruling out a near-term pullback to at least 2240 (centerline of the Bollinger Band), or even 2100-2150 region (lower Bollinger Band and 30-day moving average), which we still consider as healthy (10% downside from here).

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