DBS, OCBC and UOB: More downside or reversal?

Long time regular readers of my blogs know that I have been accumulating stocks of DBS, OCBC and UOB.

The last time I did this on a relatively significant scale was in October 2022.

Over a few days, I increased my investments in OCBC by 11% and UOB by 19%.

Then, the local lenders' stock prices rose and I ceased accumulation.

I like to think that I was not suffering from an anchoring effect as I simply refused to pay higher prices to increase my stakes.

I just didn't think I would be getting as much value for money at much higher prices.

I was adding to my investment in OCBC at almost book value and paying a 5% or so premium to UOB's book value in October 2022.

With the stocks selling off, it now seems that I might have a chance to accumulate at those levels again.

This is a realistic expectation as trading volume has expanded significantly as bearish sentiment took hold.

Of course, seasoned traders know that stock prices could simply drift lower on low volume but when there is high volume on down days, it adds fuel to the fire.

In this blog, I will talk to myself about where I think the stock prices of DBS, OCBC and UOB might be heading.

As I do this, I remind myself that technical analysis is about probability and not certainty.

I will start with what I feel is the weakest of the three, UOB.

Of the three banks, UOB is the only one to end the day with a red candle.

UOB's stock price started the day at $28.05 but closed at $27.84.

The bears are strong here and the flat 200 days moving average at $28.47 will probably be the resistance level to watch for now.

The MFI has entered oversold territory which might bring out some bargain hunters but with momentum deep in negative territory, it is unlikely that UOB would break resistance provided by the 200 days moving average.

I see the next significant support at around $26.90.

This is a many times tested support level which was also the resistance level in the month of October last year.

I feel that DBS's stock shares a similar fate to UOB's but it ended the day with a green candle which is a sign that the selling pressure here is better absorbed compared to UOB's case.

DBS opened at $31.70 but closed higher at $32.33.

Similar to UOB, the 200 days moving average at $33.15, previously the support, will now be the resistance to watch.

Just like UOB, DBS is now in oversold territory which could result in some bargain hunting.

We could see the gap filled at $32.70 in such a case but with momentum deep in negative territory, it is unlikely that resistance provided by the 200 days moving average could be overcome.

We could possibly see a retracement to $30.00 or so a share which was the support level seen in the months of June and July last year.

This is if the bearish sentiment continues to dominate.

So, that leaves us with OCBC which has exhibited the most resilience.

Even though the trading volume was much higher than the day before, a green spinning top, a reversal signal formed.

Now, a single candle reversal signal isn't very strong and it could very well fail.

Just like DBS and UOB, OCBC is now trading at below its 200 days moving average.

Unlike UOB's which has flatlined, OCBC's 200 days moving average, currently at $12.14, is still rising although gently.

The positive divergence in OCBC's chart which I mentioned in recent blogs on our local banks' price action is still visible.

If I were to join the the lowest points in July and October last year, we can see that OCBC's uptrend is still intact.

The trendline could provide immediate support which seems to be at $11.80 to $11.90 this week.

If that breaks, then, the uptrend is broken and we could see a retracement to various supports at $11.70, $11.50 and then $11.30.

These price levels have acted as important supports and resistance many times before.

Depending on which side of the fence we are on, the bear can be a friend or a foe.

If we have been doing the right things, the bear is our friend.

UPDATE:
More than 50% of tickets for "Evening with AK and friends 2023" have been sold. As expected, the tickets are selling at a slower pace this time.
Evening with AK and friends 2023. Ticketing.

Related post:
Buy OCBC. DBS and UOB next?