Medium-term technical outlook on OCBC (SGX: O39)
Key technical elements
- Since its 09 November 2016 low of 8.33, OCBC has been evolving in a medium-term bullish ascending channel.
- The key medium-term support rests at 10.87 which is defined by the lower boundary of the aforementioned ascending channel and the former major range resistance of April 2015/May 2013.
- The daily RSI oscillator has continued to inch higher from its corresponding ascending trendline support at the 44% level and still has potential room to manoeuvre to the upside before it reaches an extreme overbought level. These observations suggest that medium-term upside momentum of price action has started to resurface.
- In addition, today’s (05 Oct) rebound in price action has been accompanied by an increase in volume as compared with the prior average three days’ volume.
- The relative strength chart of OCBC against the benchmark Straits Times Index (STI) continues to advocate further potential outperformance of OCBC against the STI.
Key levels (1 to 3 months)
Intermediate support: 11.11
Pivot (key support): 10.87
Resistances: 11.49, 12.05 & 12.40
Next support: 9.52
Therefore, current elements suggest that the recent seven weeks of pull-back consolidation from its 27 July 2017 high of 11.49 has started to show signs of a potential bullish reversal to kick-start another bullish impulsive upleg. As long as the 10.87 medium-term pivotal support holds , OCBC may see a further potential upmove to retest 11.49 before targeting the next resistance at 12.05 (upper boundary of the ascending channel & the 0.382 Fibonacci projection from 09 Nov 2016 low).
However, failure to hold above 10.87 should invalidate the medium-term uptrend from 09 November 2016 low to open up scope for a potential multi-month corrective decline towards the next support at 9.52.
Charts are from eSignal
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