Temporary pause near 23.6% upward retracement level at 1860 to 1880 possible. Pullback to 1717 to 1737 should be viewed as a buying opportunity
Our view for STI 2140 remains intact. While we do not rule out a temporary pause near the 23.6% upward retracement level at 1860 to 1880, a pullback to 1717 to 1737 should be viewed as another buying opportunity. We maintain buying into early cyclical plays i.e. basic resource, financial, property and technology stocks. We are also positive on O&M stocks as a beta/recovery play. While financial and property stocks are expected to lead the STI higher to 2140 post the anticipated minor pullback, we also believe that laggard index stocks (e.g. SPH) and small caps should begin to steal the limelight as investors’ participation rate increases in the weeks ahead.
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