Daily Markets Briefing: STI up 0.3%

But expect a pullback today.

According to OCBC, the sharp pullback on Wall Street overnight is likely to weigh on local sentiment this morning.

Here’s more from OCBC:

Although the STI ended 0.3% higher yesterday, the rebound was half-hearted at best, compared to the losses of nearly 1.7% over the previous two sessions.

In fact, the price action yesterday formed a doji star, which also led the daily MACD indicator to cut down, suggesting that the bears may soon take the upper hand.

The index faces an important support around 3301, provided by the 30-DMA and mid of Bollinger Band; a breach could send it back towards 3231 (lower Bollinger Band), or even 3170 (50% retracement of the 2953-3387 rally).

On the upside, we peg the immediate hurdle at 3332 (intraday high yesterday), ahead of 3371 (upper Bollinger band). Note that the parabolic buy signal will only be triggered around 3384.