Daily Markets Briefing: STI up 0.12%

Brace for a pullback today.

According to OCBC, while continued gains on Wall Street overnight could keep local sentiment fairly upbeat, the STI could be hard pressed to chalk up further gains, especially after the smart 8.8% rebound since Brexit.

Here’s more from OCBC:

Besides a still-weak fundamental picture (Jun NODX fell 2.3%), we believe that any earnings disappointment could provide a convenient excuse to take profit; local banks are due to report 2Q earnings around end Jul. 

Technically, we note that the recent price action may have also formed a potential reversal signal; daily RSI is now just shy of the overbought region, while MACD is starting to turn down. 

For now, we peg the key hurdle at 2990-3000 region; key support at 2900. Overall volume slipped 20% yesterday; total value was down 18%; average value/unit was flat at S$0.55.