Daily Markets Briefing: STI up 0.4%

Index must conquer the 3415 hurdle, says analyst.

According to OCBC Investment Research:

While the firmer Wall Street close overnight could keep local sentiment modestly positive, we note that there is a risk of a near-term top being formed.

The STI, which closed 0.4% higher yesterday, would need to convincingly conquer the 3415 hurdle (centre of Bollinger band, also 20-DMA); otherwise, the 5-DMA (now at 3417) could make a negative crossover.

Although the daily RSI shows the market is not overbought, the daily MACD has already cut down and this was on the day when the STI made the 3464 intraday high.

Recent interest continues to be on penny stocks – average value per unit trade was just S$0.39.

As such, tread with caution and a better entry level would be around 3322 (recent minor peaks).