Expect muted gains today.
According to OCBC, the sharp rebound on Wall Street should continue to keep local sentiment buoyant, although some market watchers believe that the overnight rally was driven largely by short-covering; the Nikkei has jumped 2.5% in early trade.
However, do note that while the daily technical have turned more positive, the STI’s continued gains hinge on the ability of the index to convincingly clear the key 2700 resistance.
Here’s more from OCBC:
As before, a persistent failure could entice the bears to set up new shorts, sending the STI slipping back towards 2600.
On the other hand, a strong break could lead to further gains towards the next key 2800 level.
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