Daily Markets Briefing: STI down 0.8%

Medium term still remains muted.

According to OCBC, after tumbling 0.8% yesterday, the much stronger Wall Street close overnight should bring some relief to the local bourse this morning.

Here's more from OCBC:

However, we could still see investors using the technical rebound to sell into strength, given that the medium-term picture for the STI remains somewhat muted; the 50-DMA (now at 3438) could cut down on the 100-DMA (now at 3426); MACD still stuck deep inside the negative region.

But for now, as long as the STI stays above 3300 (61.8% retracement of 3149-3549 rally), we should see the index making an attempt to test the upper boundary (now around 3334) of the downtrend since peaking at 3549.

Still, failure to clear the next hurdle at 3358 (mid Mar 2015 high, also various peaks in 2014) could see the STI sliding back towards 3300 and even 3234 (early Jul 2014 low).