Daily Markets Briefing: STI down 0.48%

Expect more gains today.

According to OCBC, although Wall Street rebounded from earlier losses to end mostly flat overnight, the view that the markets are starting to look toppish is growing; we note that the STI is close to showing overbought signals.

Here’s more from OCBC:

Likewise, we could continue to see further profit-taking in the local bourse, extending yesterday’s 0.5% decline; this setting up the index for a test of the initial and key 2800 support.

A break could send the STI slipping further towards 2700, but should it hold, the STI looks likely to tread higher towards 2900 in the coming sessions.

On another note, the volume has jumped considerably to some 3.1b units traded, but value has fallen back to S$0.53/unit, with gainers still outpacing losers 291 to 213; this suggests penny plays are back on the radar and the market could be starting to look frothy.