SPH – OCBC
– SPH has corrected over the last 3 months from a peak at S$4.64. We observed that recently the price decline had been on the back of low volume, suggesting the downtrend could be losing momentum.
– While the price is currently testing the support at the short-term uptrend line (formed by the higher lows between Aug 07 and Jan 08), we do expect it to hold.
– We observed that the stochastic indicator is not only trading within the oversold region but is also displaying a positive divergence – this indicates a possibility of a rebound.
– A rebound from here would result in SPH facing immediate resistance at the moving average convergence region around S$4.38 – 4.42. Should SPH succeed in trading past this region, the next resistance level is at S$4.50.
– If the current support at the uptrend line fails to hold, subsequent support is around S$4.09 – 4.15.