The mild euphoria over the local banks’ results is probably over. For instance, even adjusted for UOB’s generous interim dividend of 85 cents, prices are lower ex-dividend. This scenario may be repeated with both DBS and OCBC which reported results - and generous dividends- on Aug 3 and 4 respectively.
On Aug 1, the Straits Times Index tested a 2023 high of 3,373 before retreating. In a three short days, the index is down 81 points, ending at 3,372 on Aug 4. The Aug 1 high is within a few percentage points of Jan 27 high of 3,399. Important highs often act as resistances. As such the STI now has a couple of reference points as resistance levels.
During the week, short term indicators moved to overbought levels with smoothed short term RSI testing 82, a level that can be viewed as almost the top end of its range before retreating. This indicator has room to fall, and a test of 3,230 may coincide with its lower oversold region. The 3,230 level also represents the confluence of the 50-, 100- and 200-day moving averages.
