OUE’s outlook is obvious following the formation of its shooting star. The stock is in the process of covering a gap. In theory, gaps that are quickly covered are usually exhaustion gaps. This gap gets covered at $1.40. In the chart, climactic selling is evident in the high volume that accompanied the shooting star on April 14 this year so an exhaustion gap cannot be ruled out.
The price ascent of property-related stocks like Singapore Press Holdings (SPH), and those with limited free float such as United Industrial Corp, have stopped temporarily. Other stocks, such as OUE — which probably peaked on April 14 in the form of a shooting star on the candlestick chart — may be getting ready for an exhaustion gap.
The SPH stock has almost doubled since its low of $1 in November 2020. The move down to $1 and out of it formed part of a major multi-month base formation. Hence, the ability of this stock to climb through February to April was not a surprise. The initial target was $1.60, before it was lifted to $1.90. The roundophobic $2 mark coupled with a resistance at this area was always likely to cause prices to halt. Even if SPH builds a minor top, its moving averages continue to rise. In addition, long term momentum indicators such as one-year and twoyear momentum indicators and their smoothed counterparts are rising. Hence, prices should be able to find support at the initial target of $1.60, and build a base from there to retest $2.
