Technical Analysis: Singapore Banks-The banks had a massive sell-off in a similar fashion March 18, 2020 2146

  • The 3 largest banks in Singapore was not spared the massive sell-off in early March 2020.
  • Technical analysis suggests that the sell-off is far from over given the momentum.
  • Wave analysis indicates that the bearish impulse is going strong on a larger time frame.
  • The initial bearish correction has now turn into an impulsive leg. Any form of rebound is to be taken as a correction, more selling is expected.
  • Our analysis of the 3 banks below, will provide the technical support or rebound levels.

Figure 1: DBS weekly chart

DBS weekly chart indicate that the stock has completed its 5-wave primary bullish impulse wave in early 2018. Subsequent price movement indicates a corrective wave with the current wave as an extended ((iii)) wave of the ((C)) leg. The short-term price movement will continue to move downward to 17.40-17.39 before a rebound back to 20.00 before resuming the sell-off to 15.289-14.62 or 13.24-13.94. These two above mentioned zones are the potential demand level which will exhibit a stronger bullish rebound.

On the indicator front, prices have been trending below the 50 and 200 SMA, indicating a stronger than expected downtrend.

DBS Daily chart shows a strong extended ((iii)) wave and prices have already exceeded 423.6% extension level. However, candlestick shows a strong bearish candle on Tuesday close and should the next period candle be bullish, it will indicate a rebound correction till 19.00-19.07. However, be cautious as the rebound is short-lived and the price will continue fall beyond 18.00 level.

UOB display a similar wave and price structure as DBS. But UOB has more promising technicals than DBS. Although UOB has broken below the 161.8% expansion of wave ((i))-((iii)) of the ((C)) corrective leg, the verdict is not yet finalised as the weekly candle has yet to be closed. Should the weekly candle close above 19.70, then we will see a short term rebound to 20.00 before a sell-off to 17.19-16.80 which is a strong area of demand for a bullish rebound.

UOB daily chart indicates a stronger bullish performance as compared to its peers. The strongest conviction is that UOB price has been sustaining above 19.28 and the presence of a shooting star signal a much-needed rebound. Do note that the rebound is not the end of the downturn nor a recovery but it is a correction instead. The sell-off will occur at 20.50-21.00 region and continue the downturn till 17.31.

 

OCBC wave count indicate the wave ((iv)) rebound at 200.0% expansion level is closing in and resuming sell-off at 9.00-9.09 level. Potential rebound is near 7.41 region.  

OCBC daily candlesticks show a long-legged doji formation, which is a prelude of a potential morning star, a triple candlesticks bullish reversal pattern. Should there be a formation of a morning star, we will see a rebound correction to 9.40 before commencing another wave of sell-off.

 

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