STEng – OCBC
Gearing up for a short-term reversal
– ST Engineering (STE) suffered a severe decline over the last 12 months, shedding approximately 32% since it peaked at S$4.02 on 23 July 07.
– The oversold position and positive divergence currently being displayed by the stochastic indicator suggests that STE is in store for a rebound in the near-term.
– The reversal candlestick formation 2 trading sessions ago was on the back of high volume, indicating STE is attempting to reverse trend at this juncture,
– With the price currently hovering within a key support region of S$2.70 – 2.80, we feel a near-term base has been formed and we anticipate STE to head towards the S$3.10 – 3.15 resistance, which was a key reversal level since Mar 07.