Daily Markets Briefing: STI down 0.2%

Expect another pullback today.

According to OCBC, the muted showing on Wall Street overnight could encourage further profit-taking in the local bourse today, extending the STI’s 0.2% pullback yesterday.

Here's more from OCBC:

Even though the daily MACD still looks pretty bullish, we note that the market looks heavily overbought (RSI around 75%, stochastic at 92%).

As such, we believe profit-taking on the STI’s 12.7% rally since 17 Oct is not only healthy but also necessary before we see further gains.

Furthermore, the index is already hitting the upper boundary of the uptrend channel since 17 Oct.

For now, we peg the initial support around 3458-3469 region (previous peaks), ahead of 3336 (lower Bollinger Band). Upside cap is around 3549.

Separately, local tech stocks could be under a bit of selling pressure after poor results from US chipmakers.