Downtrend?

Market drop by quite a far bit these few days and trapped those contra players. The sell down was fast... Despite that, OCBC performed well, gained 1.16% after the announcement of their results.

Overall, market sentiment today is pretty negative. Jitters over the Europe debts problems caused the US market to lose 225 points yesterday. As a result. STI gap down today and open at 2863. At present, It is down about 36 points and currently trading at 2864. The Hong Kong and Shanghai market is also not performing and Hong Kong is down by about 400+. It will be tough for STI to recover today unless we see improvement in the regional markets. Volume traded today is also thin, mostly retail investors. Research reports did mention that there might be selling pressure for blue chips when volatility starts to rise.

We were taken aback by this news. One of the largest IPO this year fo far, New Century Shipbuilding actually withdraw from their planned IPO and this news damped the sentiments of the shipping counters like Cosco, NOL,, Yangzijiang, Jaya, JES.



STI should find strong support at 2740-50 in event latest 6% pullback develop into a near 10% correction but technical bounces likely on test of 2820-50 area. A minor technical rebound can be expected soon as the STI heads towards its key 2750 support area with 7-day RSI getting oversold at 25.3, entering the mid-Jan to early Feb zone when the index plunged 9.5% in a 20-day span from 2947 to 2666. -Amfraser Researcher, Najeeb Jarhom-