Technical Analysis Snap: StanChart dips despite beating expectations

4th Aug 2009 10:05

Despite reporting a 36% increase in half year profits in its wholesale banking unit, and an increase in net income, above market estimates, Standard Chartered's share price has started to trade lower. Investors have started to take profits after the announcement of a $1.7bn share sale. Coming as it does within 12 months of last years rights offer, may have prompted some nervousness as to the reasons for this move, but CEO Peter Sands stated that "This is not a war chest" and that it's "about us staying ahead of the game". Having been one of the best bank performers this year, the shares have more than doubled from their lows, the market was undoubtedly due a correction and it could be a classic market case of "buy on rumour and sell on fact". It does appear to have run into some form of trend line resistance from its 2007 highs, around 1,470p. A break of this level at 1,470p re-targets the April 2008 highs at 1,665p. The market does have a rather steep support line coming in at 1,222.10p but the key level of support can be found around the 1,100p level which has acted as a key support level after the break back in May this year. For periodic TA updates follow me on TwitterAlso read my Investors Guide to Technical Analysis and Level 2