SATS (SGX: S58) had a large drop at the start of the new year after the price broke the psychological support level of 5.00. Based on the technicals, we the stock to stage a bullish rebound:

1. The stock has rejected at the 127.2% Fibonacci extension level of 5.40-4.65 level by forming a long-legged doji on Wednesday.
2. Thursday strong bullish candle further confirms the bullish rise by forming a morning star candlestick formation.
3. The supply level highlighted in red confluence with the 78.6% Fibonacci retracement level of 5.17-4.41.
4. Stochastic Oscillator shows an oversold cross over, which indicate a potential bullish recovery.

*Timeline of the trade should be between 1-3 weeks from the date issued.

*The resistance gap zone at 4.75-4.82 remains a strong resistance level, should there be strong rejection with 2-3 daily periods below, there is a strong possibility that the stock will continue its downside move.

CHART LEGENDS

Stochastic Oscillator

Period = 14,3,3

Red line = Overbought line 80

Green line = Oversold line 20