The banks have lagged somewhat as stocks such as Singapore Airlinesand Keppel Corp underpinned the upmove of the past five sessions.
What could materialise is for banks to catch-up. DBS Group Holdingshas formed a minor double bottom while a positive divergence has materialised between short term RSI and DBS’s share price. It is possible for DBS to break above its neckline at $31.80 to test $33.20 and beyond.
Yields on the 10-year US treasuries remains resilient, and the yield, at 3.7284% as at June 15, remains above its moving averages, with its 200-day moving average at 3.6549%. The 10-year yield needs to fall below 3.65% for any sustained equity rally.
Currently, a few large caps in the US are holding up the indices. This strength needs to broaden out during the summer for the US market to regain its up-momentum. Failing this, markets - led by the US - are likely to remain somewhat moribund.
See also: STI may retreat on strong overbought pressures but REIT Index may break out
