Daily Market Outlook for 30-Nov-2011

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STI tried to continue its rebound yesterday but it faces eager sellers which created the selling pressure for the day. STI opened higher in reaction to DJI’s overnight rally which it failed to sustain despite the Asian market trading on the positive side. STI ended 6% down. Last night, the Europe market closed positive and it brought DJI to close 32pts up. Buying strength was lacking in the DJI yesterday as market participants were staying cautious. Will STI be able to stay bullish for today? Can STI test 2740 resistance level this week?               
              
STI ended with a black candle yesterday. Despite the bearish action yesterday, the short term indicators still managed to confirm their bullish signal. With bullish signal being confirmed, the sentiment still remains bullish and this can help STI to maintain it bullishness. 2740 resistance level is still yet to be tested and it is likely to continue to rebound to test that level. However, if STI fails to continue its bullish sentiment today, 2680 level will be the key level to determine if STI still have the strength to continue or the downtrend will be formed. Hence, STI is expected to be hovering between 2680 – 2740 levels for today.               
              
Most of the banks managed to continue their rebound yesterday but some selling pressure was seen during the intraday. Ocbc failed to close higher as traders of this counters decided to take profit off the rebound. Despite the selling pressure, the bullish sentiment remains. The offshores failed to trade higher yesterday as they faces resistance from their resistance levels. Kepcorp and Sembcorp managed to test their 20ma resistance line yesterday but selling sets in after they have tested the level. Their trend remains sideways and their immediate support level will be the key level to determine if they will be turning downtrend.               
              
The properties, mostly, traded lower yesterday as there is lack of catalyst for them to trade higher. Citydev and Capitaland, which enjoyed a sharp rebound on Monday, was flooded with profit takers are they made use of the sharp rebound to close their positions. F&N was the cream of the crop as it rise sharply and broke the immediate resistance level. F&N might have confirmed its uptrend formation if it continues to trade higher today. The commodities, generally, traded lower yesterday although they open higher yesterday. Golden agri, which breakout for an uptrend formation, failed to trade higher yesterday. Sakari continues to face selling pressure and it is uncertain of whether its support level will hold. If its recent low of 1.87 fails to hold, Sakari is expected to slide further.                
              
In conclusion, the positive news of IMF failed to bring much cheer to our market as traders were still staying cautious. The indicators were still indicating bullishness and this might help STI to stay bullish for today. Resistance of 2740 level is expected to be tested for this week but the climb towards it will remain slow. The Offshore and Commodities sectors might be a drag for the STI as they are facing their respective resistance level. The banks and the properties might be the main mover for the STI to reach 2740. Henceforth, STI might face difficulty in its continuation of its rebound and upside will be in a gradual movement. 2680 level will be the key level to determine if STI will still have strength to go higher.              
              
Long traders whom had entered long positions might be disappointed with yesterday’s movement. Long traders should set trailing stop to protect themselves from unnecessary losses and target should still remain. Entering new long positive might not be wise now. Shortist might be interested to short due to yesterday’s movement. However, as STI has yet to reach its expected resistance level, it will be better to wait for a better setup for shorting.