Technical Analysis: Singapore Banks – Rebound is corrective and the next fall will be greater April 17, 2020 1658

  • The 3 largest banks in Singapore was not spared the massive sell-off in early March and the sell-off was exposed by the weakness of the banks.
  • Despite the weak economic conditions and rise number of new cases in April 2020, the banks had a steady rebound as we have forecasted in our report on 18th March 2020
  • Out of the 3 banks, DBS remains the leading indicator among the 3 banks.
  • We expect the sell-off to intensify after the current round of correction as the technicals indicate a weakening momentum.


DBS weekly chart shows the clear and expected rebound at 17.39, which is the  161.8% extension level of 31.25-22.69. The rebound forms a strong bullish engulfing but subsequent candlestick momentum shows a lack of a strong bull, thus there is a clear signal that selling begins to emerge at the 20.00 psychological resistance, which confluence with the November 2017 low.

Should price remains below 20.00 by end of this week, there will be a clear indication that price will continue its 5th wave down to 14.74-15.28 or 13.94-13.24 before a rebound.


DBS Daily chart shows a clearer picture of the bearish price action. The Dark Cloud cover formation below 20.00 psychological formation clearly indicate a strong signal to sell. Despite an earlier attempt to rebound on Thursday, price close at the low of the Wednesday candle.

Rising wedge formation signal a sell and with price trending below the 50 and 200 Simple moving average, it shows a clear strong downtrend with both the Death cross and Stochastic oversold crosses supporting a strong sell-off to come.  


As expected, UOB displays a similar wave and price structure as DBS but UOB sell-off was much more intense than DBS with the 3rd wave further extending into the potential C wave zone. Price rebounded as expected at 17.30 demand region based on the March report and the rebound mirrored the structure of DBS with sell-off occurring at 20.00 region. Should the price remains below 20.00, we could see price sell-off further towards 16.80-17.19 demand region.   


UOB daily chart shows a rising wedge formation with price attempting to rebound at the lower bound of the wedge formation but was met with failure when price closes below the Wednesday’s low. Backtrack to Tuesday and Wednesday, price action suggest that the stock attempt to break 38.2% of sub-wave iii ended with a failure.

On the indicator front, the death cross and Stochastic oversold crosses is a clear signal of further intensity in the sell-off.


OCBC rebound was met with a false breakdown on 23rd March 2020 and subsequently, recovered back to the resistance turned support level at 8.23. Price reacted strongly at the 9.00 psychological level and prices remain below 9.00, the sell-off will intensify towards 7.57-7.38 demand region.


OCBC daily candlesticks formation shows a tweezer top with price closing below 9.00 as of Thursday. Rising wedge formation and Stochastic oversold crosses will intensify the sell-down.




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