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A late night chat with La Papillion in his cbox led to a comparison between F&N and Keppel Corp. I decided to do a TA on both counters to see which one has relative strength.
F&N's close at $3.83 is supported by the rising 200dMA and the trendline support which I have drawn in orange color. Further decline in price would mean that the uptrend is over and it's a double whammy for F&N as the 200dMA which is an indication of long term trend would be violated at the same time. A quick look at the weekly chart indicates the next support to be provided by the 100wMA which is at $3.65.
Using two sets of Fibo lines, we see that the $4.00 mark has two Fibo lines which are very close to each other which indicate that it is an important support. This is further confirmed when we realise that it is a many times tested candlestick resistance turned support as well. Breaking this critical support on 2 Feb was a very bearish sign.
The MFI continues to decline and has formed a new low. It is nearing the oversold region. That the volume has been diminishing as the price weakened in the last two weeks is a positive for the bulls. There is a chance we might have a candlestick formation known as the morning star if the price opens higher than $3.89 in the next session and closes higher. For those who have bought some in the last session or two, good luck.
Keppel Corp's chart, relative to F&N's, shows some strength. Overall, Keppel Corp's price is being held down by a gently rising 200wMA. Everytime its price approaches the 200wMA, it would pull back. The 200wMA is currently at $8.87.
The buying momentum has not weakened as much as F&N's as could be seen in the MFI. The index has been forming higher lows and recently formed a lower high. However, breaking the 100dMA support on high volume to form a doji at $8.18 isn't exactly comforting.
Of course, it is possible that the price action is setting up for a morning star formation as well. This will transpire if next session sees the price opening above $8.20 and closing higher. In the next session, we will also have confirmation if the 100dMA is now a support turned resistance at $8.26 thereabouts.
I have drawn the trendline support in orange color and just like F&N, Keppel Corp is resting on the trendline and if price weakens further in the next session, the fast rising 200dMA is at $7.75 and should provide support.
Both blue chips, in my opinion, have a strong thrill factor at the moment. To those who are vested, sit tight for the ride and good luck.
Related post:
Revisiting Keppel Corporation.
Bloggy Award
11 comments:
hi ak71,
i bought kepcorp @8.50(10lots) and again @8.35(5 lots)...time has come on monday to decide whether to pick up the stock or cut loss...all the good news that kepcorp has doesnt attract enough buyers to keep price firm up for its value...over and over again i read many stock call TP $10plus since last year..I believe that you have read the edge (1-7feb) Damage done "testing neckline of top formation"...what do they mean??? Someone preventing it from going higher ?
roni (remember me?)ps nice of u to do ta on kepcorp thks
Hi AK71,
Would it be good to cut loss now for Kepcorp at $8.12, as it seems that US index is poised for a downward trending towards the support at 9700 for the DJ Index. Could it be better to cut loss now and wait for DJ to touch 9700 before buying Kepcorp back again??? - AT301273
Hi Roni,
Yes, I remember you. I remember you bought plenty of Healthway Medical's shares, right? I don't remember you saying anything about being vested in KepCorp. :)
I did a TA for KepCorp out of curiosity. Haha. Didn't do it specially for anyone. No need to thank me. ;)
As for what Goola Warden meant in the last issue of The EDGE, you know how people would look out for a double bottom formation to load up on stocks? Sometimes, we get triple bottom formations. Nice. Well, conversely, people also look out for double top or triple top formations to offload their stocks or to go short.
You can draw a straight line connecting these tops or bottoms as the case may be. For tops, the line represents a support. For bottoms, the line represents a resistance.
When Goola wrote that article in question, KepCorp was testing this support line of the top formation and if it broke, there would be more downside. Unfortunately, it did break.
As for the target prices issued by analysts, don't take them as the gospel truth. DMG had a target price of 28c for Healthway Medical. Remember?
Do your own FA and TA. I don't know if you have read this post yet:
http://singaporeanstocksinvestor.blogspot.com/2009/12/stockmarket-analysts.html
Don't be too disheartened. I have been burnt many times in my earlier days and even later days because I was too casual with my investment decisions. Important thing is not to repeat the same mistake or we try anyway.
Hi AT301273,
The only thing I can do is to tell you what I see in the charts. I cannot provide advisory as to what I think is a good action plan.
As always, TA shows two possible outcomes, it doesn't show what will happen but what might happen. No one can say what will happen for sure.
If KepCorp forms a morning star candlestick formation on Monday, that's good news for the bulls as that means price could rise to test the 100dMA which is at $8.26 now. Remember, TA shows where the resistance is, it might not get there. Having said this, if sentiments turn bullish, it could demolish this resistance level although it doesn't look likely.
If KepCorp fails to open higher to form a morning star candlestick pattern, then, things look bad and the bulls will have to hope that the current support holds, failing which, there is some way to fall. Good luck.
hi ak71,
yes im still holding hw like a baby and thinking when to average down the road? maybe have to wait for another good news....yes i did a mentioned about kepcorp in my portfolio...I also bought GA at 0.555 and bought on friday again at 0.505....hope there is a technical rebound on Monday. Check this out !!
February 6, 2010
'It's bargain hunting in an oversold market,' said Cleveland Rueckert, market analyst at Birinyi Associates in Stamford,
Conneticut. 'At least in the short term, selling was overdone.'
Major indexes turned positive heading into the close, as investors scooped up shares in the technology and materials
sectors - two of the worst perforomers during the market's latest pullback.
-- REUTERS View charts at http://tactcharts.blogspot.com/2010/02/djia-reverse-symmetrical-triangle.html
Roni
Hi Roni,
Yes, when things get sold down too rapidly, there would usually be a move in the opposite direction in the short term. That's what they call a technical rebound. If the overall trend is still down, then, this presents an opportunity to reduce exposure.
Thanks for sharing the link. :)
Hi Ak,
I was analysing the way you analyse charts :) 'Condom' is switched on, 3 MA lines, trendlines, volume analysis and a lot of candles :)
I don't really do candles. They can't light up my way ;) I remember someone told me this, "when the wind is too strong, the light on the candles will be blown out, then you'll be groping in the darkness" :)
That said, I only recognise 3 candle patterns, bullish/bearish engulfing and doji. Haha :)
Hi LP,
Haha.. What about the MFI and the Fibo lines? You left those out. ;)
Candlesticks were the first thing I read up on in TA. My first TA book was "Candlestick Charting for Dummies". ;)
I love Kep Corp since 2001 and still having fun with her. Good lover.
Technical indicators: The way of Pizza
http://createwealth8888.blogspot.com/2010/02/technical-indicators-part-2.html
Hi CW,
Faithful in love. Very good. :)
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