Daily Markets Briefing: STI up 1.9%

Main support lies at the 3200 mark.

OCBC Investment Research said:

Although Wall Street surged to new highs overnight, the Nikkei only opened modestly higher this morning (now +0.2%); and we suspect gains on the local bourse may also be more modest, especially after the 1.9% leap yesterday.

Moreover, the STI has also entered into a previous congestion band (3233-3319); and we may see a potential retest of the lower boundary before we see more buying interest.

Nevertheless, the short-term outlook remains somewhat more upbeat as the STI has just triggered the parabolic buy signal (and sell signal now sited around 3065); and the daily MACD indicator continues to trend up strongly inside the negative region.

For now, main support remains at 3200, ahead of 3155 (centre of Bollinger band).

On the upside, the next hurdle lies at 3265 (50% retracement of the 3464-3065 correction).