DBS – Goldman Sach probe to affect its rally?

Trend: Possible Downtrend (1 lower high seen), 20ma up, MacD above 0

Support: 14.88 – 14.96 (rising window), 14.60 (50ma + 100ma close), 14.24 (200ma close)

Resistance: 15.18 (20ma), 15.58

Observations:
Candlestick – Black candle broke 20ma
Histogram –many Rs. No bearish divergence is seen.
RSI – Slightly above 50%. No bearish divergence is seen.
Stochastic – No Bullish crossover yet. Approaching oversold.
Bollinger Band – Closer to mid band. Squeezing.

Conclusion:
Goldman Sach probe has been a big concern for the US market as it could impact on how the financials will operate in the future. Hence, it could impact on the sentiment on local banking stocks too. Let’s look at the technical aspects of DBS.

Based on yesterday’s data, DBS started to form a lower high last week but the indicators had yet to show downtrend signs probably due to its lagging nature. But what is certain is that the bullish uptrend could have come to a halt as the market today approaches the previous higher low. In an uptrend chart, lows will always be higher. Hence, price retracing to the support of 14.96 could mean the trend have changed to sideway or downtrend. In order for DBS to form downtrend, it must break the rising window as support level of 14.88 – 14.96 level in order to form a convincing lower low.

But on the positive side, the indicators are yet to show very bearish signs and could possible retain the bullish momentum. To confirm the continuation of upside, DBS must not only break 15.18 resistance, it must also break 15.58 resistance in order to retain its uptrend momentum.

What to watch out for this week:
1) If there is a rebound, it might be resisted by 15.18 level to form another lower high.
2) If 15.18 also break, it could be resisted by 15.58 as the trend maybe sideway
3) If 14.88 – 14.96 fails to hold, a lower low could be form at 14.60 level, thus confirming the trend to be downtrend.

Trading strategy to adapt right now:
- Stand aside for clearer trend to be formed
- Good stop level could be established at 14.88 level.
- Will look into shorting if 14.88 level breaks.

*Disclaimer applies