Market Outlook for 01/04/2011

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STI ended a nudge higher yesterday as it continued it bullish streak yesterday. It tried very hard to test 3120 level yesterday but profit takers came in to push the prices down causing it to end the month at 3100 level. This closing has ended the month as a white monthly candle that sits nicely at a support level looking ready for its monthly uptrend to continue. This could be a good sign in the coming April. Will the start of April starts with a bullish tune or a bearish one?              
              
The daily candle ended yesterday was a doji alike candle which is shows trouble breaking the previous high of 3113 level. STI yesterday did briefly trade at 3115 level but was quick to be pressed downwards. However, STI still managed to stay above the 50ma and 20ma line. Both of these lines are now trading around 3080 level. The 20ma line is now around 3040 level. With yesterday’s candle indicating weakness in the bullish sentiment, there is a high chance that the bear might take control today and cause a retracement. This retracement could retrace till the current MA support level of 3080 and worst case, 3040 level. However, the indicators have yet to show sign of weakness, but as noted yesterday, the indicators might not give very good readings as the trend could be sideways right now. An interesting note is that the MacD line is now touching the 0 line which indicates that the trend now might have shifted to sideways or uptrend. This further confirmed my readings of the current trend.              
              
The banks carry on to strengthen today with exception of UOB. Only DBS and Ocbc manages to clear the 50ma hurdle yesterday with significant volume. Chances of them coming back to test this 50ma level as support could be high right now. The offshores struggled to retain their bullish strength yesterday as they ended a nudge higher with exception from Sembcorp. Sembcorp ended the day with a bearish reversal pattern yesterday that need a strong confirmation. If Sembcorp is to be trading lower than 5.19 today, there is a high possibility of it retracing towards 20ma at 5.04 level currently.              
              
The properties carried on to be pretty mixed as only selected counter continued to be bullish. Citydev and Capitaland tried very hard to maintain it support level and ended the day with a bullish reversal. Worth a watch for the long side. Kepland and F&N carry on with their bullish sentiment and traded much higher. It is good to note that Kepland ended as a shooting star at 100ma level. Possible retracement could be seen. Lastly, the commodities failed to shine yesterday as they tried their best hold their bullish sentiment. Most of them ended up lower and carried on their sideway movement. A breakout of this sideway movement is needed to see to confirm its bullishness.              
              
In conclusion, the market was trading very mixed yesterday as only selective counters carried on their bullishness. Upside seems to be capped by 3120 level and could continue to happen. The chances of retracement is getting higher right now as numerous sectors are showing signs of reluctance to trade higher. Any retracement right now should be limited by the 3080 support level. With weekend approaching and as a start of the month, traders might make use of any bullish strength right now to clear off their positions before the market closes for the week. Therefore, do expect profit taking to happen before the market closes for the week. The selling should not be a heavy one as the underlying strength now is still bullish. The strategy still remains the same. Wait for a good retracement before looking to position for a long side. Shorting should be avoided as the downside now is very limited.