Taking cue from the strong US stock performances, the STI kicked off the session strongly to break above the 2400 psychological and 38.2% Fibonacci retracement level at opening. However, it seemed that the index faced certain resistance at this level as it fluctuated above and below this level through the entire morning, suggesting that the market is uncertain of the strength of the rally in overcoming this resistance successfully.
On an intraday basis, we note that the intraday MACD indicator signaled a bearish crossover and is now heading down towards the centerline, while the intraday RSI has fallen below the overbought level. These suggest that the index could probably experience more downside potential in the afternoon session.
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