Brace for a pullback today.
According to OCBC, the rebound on Wall Street overnight should provide some reprieve to the oversold local market this morning, especially after the STI’s near-2% tumble yesterday; the Nikkei has rebounded about 1.8% in early trade.
Here’s more from OCBC:
However, with the daily MACD still looking pretty negative, we think that the market is more than likely to use the technical rebound to unwind stale longs or sell into strength; we think the trigger to sell will come if the STI fails to make any significant headway against the key 2700 hurdle.
For now, we continue to peg the initial support at 2643; though tested yesterday, it managed to hold. But we suspect more convincing bargain hunting interest is only likely to emerge closer to 2600.
Above 2700, the next hurdle lies at 2740.
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