Technical Pulse: OCBC Ltd February 9, 2018

TECHNICAL BUY

OCBC Ltd – Daily timeframe

9 FEB

*Entry Price: 12.36                             Stop loss : 11.43                     Take profit : 13.29

*OCBC Ltd will be added to the Phillip 20 Portfolio once the trade is triggered

Current Sentiment: Bullish

Support 1: 11.98                   Resistance 1: 12.85

Support 2: 11.45                   Resistance 2: 13.29

Price has been moving in a steady uptrend since December 2016 as the 20 and 60 day moving average repeatedly propelled price higher on each correction. After a good 13 months of bullish move, price finally entered into a sharp correction.

As it hit a high of 13.29 since 16/01/18, price went into a range bound mode. The subsequent bearish break below the 13.00 range low ushered in the accelerating bearish momentum. During this recent selloff, price corrected –10.5% to the 06/02/18 intraday low of 11.91.

However, with the selloff, this presents a good chance to enter back into the long-term uptrend at a better price.  The 11.98 resistance turned support area firmly halted the correction on 06/02/18. Moreover, the bullish rejection on 02/08/18 resulted in price forming an increasing volume hammer, signalling some sign of strength. In addition, the selloff has also moved the Relative Strength Index (RSI) into oversold condition lately to a low of 29 on 07/02/18 suggesting a mean reversion back to the uptrend soon.

Expect the uptrend to resume next for price to retest the 12.85 resistance area followed by 13.29.

 

Note: Our current fundamental view on OCBC Bank is a Buy rating with a fair value of $13.48.

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About the author

Profile photo of Jeremy Ng

Jeremy Ng
Investment Analyst
Phillip Securities Research Pte Ltd

Jeremy specialises in Technical Analysis and has 10 years of experience in studying price action. His areas of expertise include intermarket analysis on the equities, currencies, commodities and bonds market.

He is also a regular columnist on The Business Times - every Monday ChartPoint column.

He graduated with a Bachelor of Science in Banking and Finance from University of London.

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