Market News & Analysis


Top Story

OCBC Bank - Upside momentum is losing strength ahead of earnings

Overseas-Chinese Banking Corporation (OCBC), one of the big 3 Singapore banks will release its Q3 earnings on Tues, 05 Nov before the market open. An earnings preview brief on the Singapore banks has been published earlier last week (click here for a recap).

Right now, let us look at OCBC from a technical analysis perspective based on its latest price action.

Medium-term technical outlook on OCBC Bank



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate resistance: 11.20

Pivot (key resistance): 11.37

Support: 10.58

Resistance: 12.14

Directional Bias (1 to 3 weeks)

Bearish bias below 11.37 key medium-term pivotal resistance for a potential slide to retest the “Symmetrical Triangle” range support at 10.58.

On the other hand, a clearance with a daily close above 11.37 sees a further potential up move towards the major range resistance at 12.14 (swing high areas of 08 Aug 2018/29 Apr 2019).

Key elements

  • Since its 30 Oct 2018 low of 10.36, OCBC has been evolving within a “Symmetrical Triangle” range configuration with its upper limit acting as a resistance at 11.37.
  • The “Symmetrical Triangle” range resistance of 11.37 also confluences with a gapped down formed on 01/02 Aug 2019 and the 61.8% Fibonacci retracement of the recent slide from 25 Jul 2019 low to 29 Aug 2019 high.
  • The daily RSI oscillator is now hovering close to an extreme overbought level of 77 which indicates the risk of a mean reversion decline has increased.
  • The price action has formed a daily “Star” candlestick pattern at the end of today session, 04 Nov after a gapped up seen at the open. This observation suggests that the bulls are becoming indecisive to push prices higher due to a relative smaller price action range that has formed today in comparison with the previous 3 sessions. Thus, the recent push up from 23 Oct 2018 swing low of 10.63 may be losing upside momentum and at risk of shaping a downside reversal.  
  • Relative strength analysis as seen from the ratio chart has indicated underperformance of OCBC against the benchmark Straits Times Index (STI).

Charts are from eSignal 


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.