StarHub – OCBC
Positive breakout suggests more potential upside
– StarHub could be poised for further upside in the medium term after breaking out above the upper boundary resistance line of its 5.5-month downtrend channel on heavy volume in Friday’s trading session.
– However, with both the RSI and stochastic indicators currently showing overbought signals, StarHub could stage a pullback in the near term; this possibly to retest the resistance-turned-support line, which should serve a confirmation of the breakout.
– As such, immediate support is pegged at $2.10 (resistance-turned-support upper boundary channel line), ahead of $2.03 (resistance-turned support level).
– For the subsequent rebound, we expect an initial resistance at $2.36 (Nov ’08 high and channel breakout price target), breaking which, we see the next resistance at $2.51 (support-turned-resistance level)