SINGAPORE (May 5): Banks are at new multi-year highs and have underpinned the Straits Times Index, helping it to a new 2017 and 12-month high.

For the banks, there are no major reversal signals based on the long-term charts. But short-term indicators are at the top end of their range and this may stymie near-term up-moves. These could cause the banks to consolidate their recent gains.

Overall, though, up-momentum is strong and the uptrend is likely to resume.

For DBS, quarterly momentum has bounced off its equilibrium line and appears poised to move above its own moving average and a resistance.

Volume is expanding and prices have broken out of a three-month sideways range.

The ensuing surge may be followed by a temporary retreat.

Meanwhile, prices are looking decidedly bullish for OCBC and have broken out of a three-month sideways range.

The initial upside from the breakout is at S$10.80 and the eventual target could be as high as S$12.80.

The breakout above a three-month sideways range was accompanied by quarterly momentum breaking out of a downtrend and its own moving average. These indicators suggest that the uptrend is likely to continue.

At the same time, UOB has gained relative strength against the sector.

Its break above resistance at S$21.75 was accompanied by a surge in volume, an upturn in directional movement indicators, and a sharp rise in quarterly momentum.

Annual momentum has strengthened. These suggest superior strength.

Still, short-term indicators are at the top of their range and a temporary retreat is in force.

Outside of the banks, which quality stocks could be on the move?

Find out in “Quality stocks strengthen as banks break out” on page 29 of The Edge Singapore (week of May 8), available at newsstands now.