STI rally sputtering

STI failed to close above 3160 on Friday. This is the level which gapped up previously to challenge 3200. The rally from 3100 was largely driven by blue chip laggards, namely the banks and oil rig builders. Stochastic has start turning down from overbought levels, indicating the retreat has just started. All these evidences point to a high possibility of a short term correction. Wall Street’s Friday gain would present a good opportunity for Singapore investors to sell into strength in the morning session. Even if the Singapore market has no gain, it would be wise to take profit or cut loss.

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