Daily Markets Briefing: STI down 0.7%

Today's tone likely to improve, says analyst.

OCBC Investment Research said:

The rebound on Wall Street overnight and the strong Nikkei start (up 3% now) are likely to cue the local bourse to a positive start this morning.

Despite pulling back another 0.7% yesterday, the STI still managed to close significantly higher than its intraday low; this important sign suggests that the index has probably found a strong support at the 3100 key resistance-turned-support.

With today’s tone likely to improve, we could see the index climbing towards the 3160 support-turned-resistance.

A break above this immediate obstacle will provide further strength for the index to head for the next resistance at 3240. Meanwhile, the subsequent base lies at the 3050 gap support.