The better-than-expected results and outlook from Intel gave the local market a big boost this morning; the STI opened 0.4% up and never looked back ? the index closed nearly 1.6% higher, just a tad off its intraday high.
Overall volume jumped by a hefty 81% from the morning session yesterday, led by strong buying in tech stocks, as gainers overwhelmed losers 302 to 90. Not surprising as well, all the sub-indices were in the black, led by the FTST Tech, which climbed 3.3% higher. On the other hand, average value per share traded eased slightly to S$0.87 from S$0.95 yesterday.
But from a technical standpoint, the rally may be running out of steam soon. The intraday MACD has not only initiated a negative crossover but is also displaying signs of a negative divergence. The intraday RSI is again showing the market as overbought currently.
More importantly, we think that the index could be running into some pretty stiff headwind around 2350-2361 region (several prominent peaks in Jul); the failure to overcome this near-term resistance could provide the excuse for investors to take profit.
Having said that, the pullback may be shallow, and is limited to 2300 in the near-term, and 2270 -2282 in the short-term.
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