STI set for flat start

Market described as ‘overbought’.

OCBC Investment Research said:

The recovery on Wall Street last Friday night could cue the local bourse to a positive start this morning but the upside impact should be fairly limited.

Following the extended recovery from the middle of November 2012, the broad market is already quite overbought at the moment; as such, we could see some sort of healthy pullback or consolidation soon.

On the downside, we still peg the immediate support at 3200, with 3150 being the next key base.

On the upside, 3230 (key peaks) remains the immediate obstacle for now, as the subsequent key hurdle lies at the 3280 resistance (key peak in Jan ’11).

IG Markets Singapore meanwhile noted:

In Singapore, the STI broke through the 3200 threshold last week and notched up returns of almost 2% in its first week. But it’s still very early days and many traders are not expecting the double-digit returns of last year for the blue chip index.

For today, the futures market points to a flat start for the STI this morning.