Market Outlook for 07/04/2011

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The Bulls are really strong !!! STI failed to confirm its bearish reversal yesterday and went higher. This price action broke the resistance level of 3150 and is not heading towards the next resistance level of 3180 level. What a strong bull! Will the momentnum continue or retracement that I have expected for the past few days going to happen?              
              
The price action yesterday formed a white candle with lower shadow testing 100ma as support level. This indicates that the market is still willing to push higher and failed to confirmed the bearish shooting star. This price action also caused the bearish crossover to fail. However, the market is now trading deeper into overbought region, indicating that the bullish momentnum might continue. Upcoming resistance level would be 3180 level. The STI should be heading towards and even test that level today. Chance of retracement still remain pretty high in such condition. However, support level to watch out for would have a change. This time round, support level could be at 3150 or 3120 level. My expectation of 3080 support level would now be upgraded to 3120 level.              
              
The banking sector was pretty strong yesterday. It was primarily lead by UOB as UOB surged towards its recent high. Ocbc bk too was strong as it broke 100ma yesterday. The main gainers for the market yesterday is the offshore sector. Sembcorp was the lead of this sector as it broke out it major resistance level. Kepcorp and Sembmar followed which caused STI to end the day strongly.              
              
The properties carried on to test their resistance level yesterday. Surprisingly, F&N was very strong and is now heading towards the next resistance level. The commodities sector generally had already retraced to their resistance turn support level. Particularly, Golden Agri, indoagri, Wilmar and Noble grp. Yesterday, they managed to stay above the support level looking ready for another leg of upward movement. Wilmar would be a good counter to watchout for a long position today              
              
In conclusion, STI did a surprising move to shake off the shortist in the market. Shortist were scrambling to get out from the market as their expectation of a retracement went wrong. Today STI might be able to sustain their bullish momentnum and should trade a nudge higher before the sellers would come in again. I suspect that this bullish movement would be lead by the commodities today as they are trading close to support level and might be ready to form a higher low. The strategy would be looking at commodities for lead and if conditions are right, long position could be initiated in this sector. Shortist yet again, I have warned not to go on the short side.