Expect muted gains today.
According to OCBC, fresh weakness on Wall Street overnight could spook local sentiment once again and encourage more profit-taking today; the Nikkei plunged nearly 1.8% in early trade.
The STI, though ended 0.2% higher yesterday, not only lost most of its early gains (+1.8% at its intraday high), but it also failed to close above the key 2600 level; losers have actually outpaced gainers as well, OCBC said.
Here’s more from OCBC:
Technically, we also note that the RSI has headed south yesterday, signaling a negative divergence; this implies more downside risk in the near term.
As before, a continued failure to retake the key 2600 level could send the index sliding back towards 2500; breaking which, 2424 beckons.
For now, we peg the initial support at 2521, ahead of the key 2500; above 2600, we peg the next hurdle at 2650, with the key hurdle remaining at 2700.
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