Expect muted gains today.
According to OCBC, renewed weakness on Wall Street overnight could continue to weigh on sentiment.
Although the STI is already looking very oversold, and is currently back at a 4-year low after yesterday’s 3% plunge, it could be due for a technical rebound soon, OCBC said.
Here’s more from OCBC:
But the market’s risk aversion has grown sharply. As such, we are likely to see investors using these rebounds to unwind stale longs.
Having said that, we also note that the cash pile on the sidelines is growing and at some point in time, investors have to put it to use.
Chart-wise, 2521 will provide the initial support, ahead of the key 2500; assuming it holds, we may see a decent rebound from there to retest the 2600 hurdle.
Otherwise, the index could slide further to 2424.
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