Technical Analysis
SPC, DBS, Raffles Education

SPC

Looking for support

• SPC has pulled back as per our forecast on 10 July.
  
  
• The price drop has broken through the 50- and 100-day moving averages on the back of rising volume. This indicates the downwards momentum is strong.
  
  
• We had mentioned in our previous report that the price decline would consolidate around S$6.50 – SPC had come close to this level over the previous 2 trading sessions – before weakening further.
  
  
• The short-term stochastic indicator is rising upwards, suggesting a nearterm rebound, however we feel the downwards pressure would persist and any bounce from these levels would be mild and short-lived.
  
  
• Immediate resistance is set close to the 50- and 100-day moving averages, which is around S$6.80 – 7.00. Support is set at S$6.20.
  
  
  

DBS

Facing stiff resistance at S$19.80

• DBS has rebounded off its support to test the resistance at S$19.80; however, it failed to clear this three trading sessions ago. The resistance at S$19.80 is also in proximity to the downtrend line, thus providing a very strong barrier against further price ascension.
  
  
• The stochastic indicator has risen into oversold regions; hence we feel that the current pullback will persist a little more. But we view the pullback as being mild and lacking momentum, due to weak traded volumes in the last 2 trading sessions.
  
  
• Hence we expect DBS to retest the resistance at S$19.80 again in the weeks ahead after the price stabilizes around the immediate support at S$19.00, provided by the 100-day moving average which is in close proximity to the price consolidation region in the last 12 months.
  
  
• Subsequent support is set at S$18.10, Should DBS fall through this level, it could head to the early 2008 lows of around S$16.40 – 17.00.
  
  

Raffles Education

Trading range tightening

• Raffles Education (RED) has been trading within a wedge pattern since early 2008.
  
  
• The recent break below the wedge pattern in mid-July was unsuccessful. RED rebounded strongly over the last few trading sessions. However, the ascension has been capped by the 50- and 100-day moving averages.
  
  
• The overbought position of the short-term stochastic indicator suggests some weakness in the near-term for RED. Immediate support can be found at the lower band of the wedge pattern around S$1.07. Should this level fail to hold, subsequent support can be found at S$0.99.
  
  
• A rebound from the above mentioned levels would be capped by the resistance at S$1.25, which is in proximity to the upper band of the wedge pattern.
  
  
• Hence we anticipate the trading range for RED to tighten within the wedge pattern over the next few weeks. We caution against getting caught within this range and advocate waiting for a breakout of the wedge pattern on the back of high volume to confirm a direction move.
  
  

SHAREHOLDING DECLARATION:
The analyst/analysts who wrote this report holds NIL shares in the above security.

RATINGS AND RECOMMENDATIONS:
OCBC Investment Research’s (OIR) technical comments and recommendations are short-term and trading oriented. However, OIR’s fundamental views and ratings (Buy, Hold, Sell) are medium-term calls within a 12-month investment horizon. OCBC Investment Research’s (OIR) Buy = More than 10% upside from the current price; Hold = Trade within +/-10% from the current price; Sell = More than 10% downside from the current price.

DISCLAIMER
This report is solely for information and general circulation only and may not be published, circulated, reproduced or distributed in whole or in part to any other person without our written consent. This report should not be construed as an offer or solicitation for the subscription, purchase or sale of the securities mentioned herein. Whilst we have taken all reasonable care to ensure that the information contained in this publication is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness, and you should not act on it without first independently verifying its contents. Any opinion or estimate contained in this report is subject to change without notice. We have not given any consideration to and we have not made any investigation
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