Daily Markets Briefing: STI up 0.3%

Will today's tone improve?

OCBC Investment Research said:

Continued strength on Wall Street overnight could keep the local sentiment buoyant again this morning.
However, note that the RSI is starting to enter into overbought region, suggesting that the local market is starting to look a bit frothy, especially after chalking up another 0.3% gain yesterday, which brings the total gains since 20 Mar to 5%.

No doubt that the daily MACD shows that the momentum remains very positive; but unless the index can convincingly clear 3200, a near-term pullback may be on the cards.

Further note that recent subsequent gains came on the back of falling volume and value.

Lastly, we may need to see successful retest of the downtrend line (since mid Sep 13) to demonstrate longer-term strength.