SingTel – OCBC

Testing support

– SingTel has been on a decline since Oct 07 and is currently testing the support at the long-term uptrend line that connects the higher lows between Mar 07 and Jan 08.

– The price consolidation at the uptrend line could result in a mild rebound. Given the positive divergence displayed by the RSI and the oversold position of the stochastic indicator, we can expect a near-term rebound to the resistance level of S$3.60 – 3.68.

– However given the weak volume on days where bullish candlestick formations occurred over the previous trading week, and the downwards trending 50-, 100- and 200-day moving averages, we feel the upside is capped at this stage.

– After the mild rebound, we expect SingTel to re-test the support at the uptrend line. If this support fails to hold, we could witness the price slide towards the support at S$3.16.

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