STI turns more bearish

Meanwhile all eyes will be on Fraser & Neave, says IG Markets Singapore.

OCBC Investment Research said:

Renewed weakness on Wall Street and the lower Nikkei start (down 0.4% but off early lows) could continue to weigh on the local bourse.

The STI has turned decidedly more bearish, having triggered a parabolic sell signal yesterday; the 30-DMA has also cut down on the 50-DMA; daily MACD continues to trend lower.

As before, the index could retreat back to 2953 (38.2% retracement of 2698-3110 rally) although the 3000 level could provide a minor support.

However, we can’t rule out a technical rebound, given the recent sharp losses; but investors should consider selling into strength. Initial cap likely at 3067 (centre of Bollinger band), ahead of 3100 psychological hurdle.

IG Markets Singapore, on the other hand, noted:

For Singapore today all eyes will be on Fraser & Neave as the board is set announce their recommendation on the TCC bid. As we covered last night, given the last-minute interest from other parties it is likely to suggest the current $8.88 offer significantly undervalues the company.

We are currently pricing the STI to open around 0.5% lower when trading gets underway shortly.