The banks have been struggling to stay afloat for the past two months after the correction started in May this year. The falls have been characterized by short rebounds followed by bigger corrections, and each bounce lacked the strength to hold onto gains.

These are typical signs of a bearish market that convey a less than sanguine message to investors.

At the time of writing on 5 September at 4pm, the share prices of DBS and OCBC looked weak and have fallen into bear market territory. In a previous article, banks are bears, I discussed about the possibility of such a bearish scenario engulfing the banking stocks, so it is probably coming true.

From an intraday high and closing price perspective, the shares of DBS have fallen into bear market territory. From a technical point of view, the intraday high of $31.28 and the closing price of $30.63 on 2 May 2018 have both lost 21.7 percent and 20 percent respectively, based on the traded price of $24.50 at 4pm on 5 September. Any stock that has fallen more than 20 percent from its peak is deemed to have fallen into bear market territory.

 What about OCBC?

The share price of OCBC reached an intraday high of $14.04 on 2 May but closed at $13.96. It traded at $11.10 at 4pm on 5 September, which means that this stock lost 20.9 percent from the intraday high and 20.4 percent from the closing price on 2 May.

Applying the same generally-accepted rule that a 20 percent fall in share price deems the stock to have fallen into bear market zone, then both DBS and OCBC have entered into bearish phase.

Gabriel Gan was a Senior Vice President at AmFraser Securities. He left to join DMG Securities (now renamed as RHB Securities) to take on a similar role. During his stints at the stockbroking firms, he dealt in equities, performed advisory role and executed corporate finance deals for his clients.

Since 2001, he has been invited by the media (both Mediacorp and SPH) for his stock market opinions. On radio, he spoke on 95.8FM for more than a decade; he now speaks every Wednesday and Thursday mornings on SPH radio 96.3 FM, delivering his opinion in Mandarin. On TV, Gabriel appeared on Channel NewAsia, the former Channel U and various Channel 8 financial segments including Good Morning Singapore, Hello Singapore and MoneyWeek. On print media, he continues to give quotes and comments on the economy and stock market for Lianhe Zaobao, Lianhe Wanbao and Shinmin Daily. On top of that, Gabriel was a columnist for the now defunct My Paper.

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