Daily Markets Briefing: STI down 0.8%

The outlook will remain negative today.

According to OCBC, the modest recovery on Wall Street overnight should help to boost local sentiment this morning; but it may be nothing more than a “dead cat bounce”, as the daily technical indicators are looking more negative.

Here’s more from OCBC:

The STI, which closed 0.8% lower yesterday, after the previous session’s 0.9% tumble, could face initial resistance around 3370 (upper Bollinger Band).

But as before, we believe the market could still be looking to sell into strength. We note that the sell-off has already began for the penny stocks, with losers overwhelming gainers by more than 3 to 1 yesterday, with an average traded value of just S$0.41/unit.

And with the recent violation of the uptrend support since early Feb, we could potentially see the index easing further to 3221 (38.2% retracement of the 2953-3387 rally) or even 3170 (50% retracement).

Note that the STI is still up 4.8% YTD.