Market Outlook

Chart of the week – DBS Group potential impulsive up move sequence intact ahead of earnings

Chart of the week – DBS Group 

DBS Group potential impulsive up move sequence intact ahead of earnings

Medium-term technical analysis

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Source: CMC Markets

Time stamped: 24 Apr 2021 at 9:40 am SGT

  • Since its 2 November 2020 low of 20.25, DBS has been evolving within a medium-term ascending channel and recent price action has managed to trade above a rising 50-day moving average since 24 February now acting as an intermediate support at 28.00.
  • In addition, the daily Relative Strength Index (RSI), a momentum indicator has managed to stage a rebound from a significant corresponding ascending support at the 46% level on 22 April which suggests that the odds of a medium-term upside momentum revival have increased at this juncture. This observation supports a further potential up move in price action.
  • Hence, if the 27.40 key medium-term pivotal support holds, DBS may see another impulsive up move to target the next resistance zone of 31.00/31.28 (also its current all-time high printed on 2 May 2018) and a break above it opens up scope for 32.65/33.47 next (the upper boundary of the medium-term ascending channel & Fibonacci expansion cluster).
  • However, a daily close below 27.40 invalidates the bullish tone for a deeper corrective decline towards the 23.57 major support (the ascending trendline in place since 23 March 2020 low, the former swing high of 9 June 2020 & close to the 61.8% Fibonacci retracement of the up move from 22 September 2020 low to 6 April 2021 high).