SINGAPORE (Nov 17): Here are some stocks for our technical analysis this week:
Straits Times Index (daily)
Ideally, support appears at 3,350 for the Straits Times Index (3,341) which lost almost 80 points during the week. The move below 3,350 puts in jeopardy the STI’s upside of 3,500. But, so long as the moving averages are intact, the STI’s uptrend should be able to resume after the current corrective phase.
In the short term, indicators are significantly overstretched. ADX is at an all time high, an indication that the uptrend needs to consolidate. Short term stochastics and 21-day RSI have turned down from the top end of their range.
However, quarterly momentum and annual and 24-month momentum retmain intact. The index is also above its moving averages. The 50- and 100-day moving averages are at 3,303 and 3,289 respectively and they have acted as support and resistance lines since the start of this year. A breach of these levels would be negative.
Correction sets in for banks
The banks are experiencing a correction. This is largely in reaction to the rise of DBS Group Holdings following a set of results that underwhelmed. The upmove caused DBS’s indicators to become extremely overstretched.
During its corrective phase, this counter is set to lose relative strength against Oversea-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB) which have displayed greater strength than DBS for the past three months.
DBS Group Holdings ($23.34): support at $22.60
Prices are undergoing a correction in reaction to extreme overstretched technical indicators.
ADX is at an all-time high, and is set to turn down. Short term stochastics which was stuck at the top end of its range has just turned down.
In addition, 21-day RSI has turned down from a one year high. These indicators point to a retreat for which initial support appears at the $22.60 to $22.80 range. Quarterly momentum and the moving averages remain intact.
