OCBC Ltd – Daily timeframe
*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.