The STI opened flat at 1707.17 but taking a cue from the strong HIS opening of >2% higher, the index climbed to a high of 1717.28 in the late morning, before ending the morning session +0.4% at 1714.51. Nevertheless, the overall sentiment remains cautious as losers continue to lead gainers 141 to 125 with 499m units traded, versus 475m traded by midday yesterday. Investors no doubt keeping an eye on the weaker US index futures - DJIA futures down 0.2% at 7908 but off 7885 low; S&P500 down 0.3% at 827.3; Nasdaq down 1.8% at 1192.75.
While it is good to see the STI holding above the 3-month uptrend line support at 1707, its intraday high of 1717 is still well short of the 1728 hurdle, suggesting some signs of market fatigue.
Not surprising as both the intraday and daily technical indicators continue to point towards more sideways trading, and this should keep the indexwithin 1707 to 1728 range.
But weekly and monthly technical indicators remain bearish, and failure to convincingly clear the key 1764 hurdle (30-day moving average and Bollinger Band centre line) could send the index back towards 1638 (lower Bollinger Band).
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