Brace for a pullback today.
According to OCBC, the pullback on Wall Street overnight could also lead to a similar move in the local bourse this morning; the Nikkei is flat in early trade.
Here’s more from OCBC:
Although the STI ended 0.7% higher yesterday, the price action has formed a potential toppish candlestick; and despite the heavier-than-usual volume/value, we further note that gains were mainly driven by several blue chips like Jardine Matheson, Jardine C&C and STE.
Hence, we could see the index making a test of the initial 2650 support once again; a break could send the STI easing back towards the key 2600 level.
On the upside, we peg the key resistance at 2700; although we may see a modest hurdle at 2684 (50-DMA).
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