Singapore Markets Morning Briefing - what you need to know for Mon Jan 16, 2012

A double whammy on Wall Street and the Nikkei will likely mean bad things for the local bourse.

OCBC Investment Research said the retreat on Wall Street last Friday night and the poor Nikkei start (-1.4%) are likely to dent local sentiments this morning.

It further noted:

The STI, which jumped nearly 1.8% higher in the last session, is now just a tad below the 2793 key resistance (Dec ’11 high).

As such, we could potentially see the index initiating a technical correction back towards the immediate support at around 2735 (minor resistance-turned-support and 100-DMA) in the days ahead.

However, we note that the medium-term outlook has improved significantly after convincingly overcoming the upper boundary of its 9-month downtrend channel.

Meanwhile, the subsequent support and resistance lies at 2683 (minor resistance-turned-support) and 2800 (psychological resistance) respectively.