Brace for a pullback today.
According to OCBC, the muted closing on Wall Street is unlikely to provide much in terms of cues for the local bourse this morning; the Nikkei has reopened 1% lower after its long weekend.
However, we note that the local market does look oversold and we may get a technical rebound soon, especially if the immediate 2700 support continues to hold, OCBC said.
Here’s more from OCBC:
But we are not expecting a strong rebound, given that the overall tone is still quite negative; instead, we may see selling into strength emerging again if the index fails to make any headway against the immediate 2740 resistance.
Below 2700, we peg the subsequent supports around 2680 and 2643. On the upside, we peg the next hurdle at 2772, ahead of the key 2800 resistance.
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