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FSL Trust: The skies are clearing up.

Sunday, July 11, 2010

Price stayed above the 20dMA in the last three sessions. The 20dMA, currently at 38.5c, is now resistance turned support. I decided to look at the 20dEMA as well.  The EMA gives greater weightage to recent prices and could sometime explain why price could not move past a certain point in the short term.  The 20dEMA is at 39.5c and seeing the price closed at 40c in the last two sessions is comforting.  However, the volumes were very low and the durability of the recent appreciation in price is questionable.  In fact, since a spike in volume on 18 Jun when the MACD made a bullish crossover with the signal line, volume has been reducing.

Let us look at some other technical indicators to gain more insights. The MACD is rising and pulling away upwards from the signal line in negative territory. The rising MACD is due to the upturning 20dMA, reversing its decline. Although this seems promising, the MFI has gone below its uptrend support due to the very thin volume in the last session as price stayed at 40c. Immediate demand seems to have reduced and some suspect that market participants are waiting for greater clarity.

Although the technicals are not totally inspiring, Mr. Market might spring a pleasant surprise on us and a further move upwards could see the gap filled at 43.5c which in the next session coincides with the declining 50dMA. Immediate support is a band from 39.5c to 38.5c. For anyone who wishes to buy into FSL Trust, technically, it would seem safer to do so now.

Related post:
FSL Trust: Above the 20dMA.


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