Daily Market Opinion for 7-Sep-2012

STI managed to test 2980 support level yesterday after 4 consecutive days of drop. STI opened with a slight gap down and selling pressure starts to pile up during the early trading hours. This selling pressure causes STI to hit as low as 2977 level before it started to recover after lunch hours. Bargain hunting was seen when it tested 2980 and the buying pressure was expedite by the positive opening of the European market. Eventually, STI managed recover to its opening price but fails to close positively. STI closed with 6.64pts down at 2989 level. Last night, ECB announced that they will be buying bonds to help the European economy. Markets cheered upon the announcement and DJI ended with a strong note of 244.52pts up. Is STI ready for a rebound? Will ECB’s announce lift STI’s trend back to uptrend again?

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