Expect more losses today.
According to OCBC, although Wall Street recovered from early losses to end mostly flat, the overall tone remains largely cautious, and it could percolate over to the local bourse; the Nikkei has opened 1.4% lower.
Here's more from OCBC:
While the STI also ended almost flat yesterday, the price action looks pretty negative; and with the RSI having just fallen out of the overbought region, we could still see some more near-term downside risk.
As such, the index could ease back down to retest the key 2800 support once again, where a strong break could send it slipping further towards 2740.
On the upside, we continue to peg the initial hurdle at the recent 2850 high, ahead of a much tougher resistance at 2900.
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