Charts tip DBS shares at technical buy, Phillip Securities says

DBS ATM in SingaporeDBS ATM in Singapore

DBS shares are a technical buy, with the recent correction set to end, according to Phillip Securities technical analysis.

The stock has been in a steady uptrend since November 2016, with the 20- and 60-day moving averages acting as a “springboard,” it said in a note on Wednesday. But after the most recent record high formed off the S$31.28 level on May 2, the price has headed into a correction phase, it noted.

“Nonetheless, we do not expect this correction to turn into a downtrend as the uptrend structure of Higher Highs (HH) and Higher Lows (HL) remain intact,” Phillip Securities said. “The long-term uptrend will be greatly affected only if price breaks below the S$26.35 Higher Low (HL) point formed on 4 April 2018. Looking at the most recent price action also suggests a possibility of the end of this correction as the 60-day moving average once again halted the selloff.”

It noted a false breakout below the S$28.56 immediate range low on May 30, with no bearish follow-through.

“More importantly, after the false bearish breakout, price rebounded higher and had succeeded in breaking above the downtrend line and 20-day moving average on 5 June 2018, suggesting for the resumption of the uptrend,” it said.

It tipped DBS shares to head higher to test resistance at S$29.71, followed by S$31.00. On the downside, it tipped support at S$28.14, followed by S$27.85.

Phillip’s fundamental analysis rates DBS at Accumulate with a S$32.70 fair value.

The stock ended Thursday down 0.07 percent at S$28.80.


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