Daily Markets Briefing: STI up 0.7%

Brace for a pullback today.

According to OCBC, continued strength on Wall Street last Friday could continue to keep local sentiment buoyant, adding to the ST’s 0.7% gains; the Nikkei is up another 1.4% in early trade.

Here’s more from OCBC:

Also with the daily technical indicators still looking pretty positive, we could see the index rising further to test the initial hurdle at 2850, where a strong break could see the STI pushing higher towards the next key 2900 hurdle.

However, do note that the market has risen sharply over the past month, suggesting that a technical correction may be due; it could likely come once it is clear that the index cannot clear the 2900 level.

In the near term, we peg the initial support at 2800, ahead of the next one at 2760 (but note that this is a rising parabolic sell signal).