StarHub – OCBC
Will there be a triple top?
– StarHub has been trading within a rising trend channel since Nov 06 but it seems to have paused over the last 2 months.
– StarHub appears to have formed a double top last week after it tested but failed to surpass its Jun 07 peak at S$3.24.
– The stock has since fallen back to sit just above the 50- and 100-day moving averages, as well as the lower band of the trend channel, suggesting downside from here looks limited.
– As the subsequent pullback was made on weak volume, coupled with the short-term stochastic indicator close to turning up inside the oversold region, we expect StarHub to rebound and retest the S$3.24 again.
– However, we do not expect the S$3.24 resistance to break due to the negative divergence that has formed on the MACD. Hence any rebound would be short-lived.
– Should the support level around the lower band of the trend channel fail to hold, StarHub could fall back to the 1st support level at S$2.75. Subsequent support set at S$2.54.
Note : In the original report by OCBC, we assume S$3.24 was wrongly stated as S$2.24 and we have corrected it accordingly for this post