STI set to resume recovery

The rally on Wall Street overnight and the positive Nikkei start are expected to boost local sentiments, says OCBC Investment Research.

OCBC Investment Research said:

The rally on Wall Street overnight and the positive Nikkei start (up 0.3% now) are likely to boost local sentiments this morning.

The STI continued to hold its ground above the 3040 immediate resistance-turned-support yesterday; following a muted start, the index traded sideways for the rest of the session before closing flat again.

But with today's tone likely to show further improvements, we could see the index resuming its recovery towards the 3100 immediate resistance (upper limit of gap resistance) again.

Beyond that, the subsequent obstacle lies at the 3140-3172 gap resistance. On the downside, the subsequent base is pegged at the 2980 recent troughs.