OCBC fell to a low of 10.58 on the morning of 5 December 2019. It was the trough of the weeks after Q3 reporting. Initially there was a rush of greed in the market thinking that there is a chance for entry nearer to $11 per share. However, selling pressure prevailed and it pushed the price to a low. It is also notable that OCBC has been dropping several hints in its daily buy backs of 150 thousand shares per day. This showed that the company has confidence and that value was surfacing in the view point of its own management after Q3 and considerations for Q4. Additionally, 500A Million debenture came in time to support the losses from Q3 from its Indonesian counterpart.
Short term outlook (Using Daily Chart MACD and RSI)
I will hardly put out so many indicators for daily chart because it is still considered weak to me on many accounts. However with the super high volume traded on 6 December and ending with a solid green candlestick, I decided to support my analysis with daily chart with a few other indicators. Basically, I noticed that the pressure from sellers has weakened and buying will continue pick up from next week on for another rally.
Near term Outlook (Weekly Chart)
As for weekly chart, we notice that last week candle was still red as of 6 December. Reason being that OCBC has tested 10.60 on many occasions in the past year as it is still in consolidation due to Trade tensions between US and China influencing the global economy. Q3 report also noted that NAV of OCBC has also recently increased to 10.084 from 10.063. Not to mention that Fed Chair Powell already assured that the recent rate cut will be the last one, thus we can also hinge on the opportunities right now to buy in and await news on rate hikes in future.
Author Call
- Support at 10.60 held and high volumes came in at 10.62 right before lunch time on 6 Dec
- OCBC 500 Million Debenture will help support its growth in the coming year
- Trump’s delay in trade deals with China will prolong consolidation (good for trading)
- Enter between 10.6 to 10.75 recommended
- Profit Taking targeted at around 11.1 to 11.2
Author Call (as of 2 Dec)
- Entry points at 10.75 (minor uptrend support) and 10.6 (weekly horizontal support)
- Buy at a price which you are comfortable with rather than timing the market for OCBC
- NAV has rose from Q3 reporting to 10.08 which is a plus point.
- Will advise to buy in trenches rather than lump sum due to uncertainty in US politics
- Fed Rates will not go down any more, signalling Net Interest Margin might go up hence forth
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