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SPH: Black spinning top.

Thursday, August 12, 2010

SPH has gapped down for two consecutive sessions.  Very bearish.  Today, it formed a black spinning top, closing at $3.97, just two bids above a natural support at $3.95.  Could $3.95 hold up as the immediate support or would it shatter?




The MACD crossed the signal line a few sessions ago and is fast declining towards zero.  The MFI formed a lower high which suggests weakening demand.  It is currently flatlining just above 50%.  Could 50% act as support? OBV shows some distribution taking place. Weakness is obvious.

TA is about probabilities and helps by letting us plan ahead.  What would we do if price goes up?  What would we do if price declines?

In this case, if price should rebound to test support turned resistance provided by the 20dMA, it might be a good idea to do a partial divestment.  This is currently at $4.06.  Price would probably encounter gap resistance at $4.04 in case of a rebound.  So, not to be greedy, this might be a better price to divest.  Just don't bang our heads against the wall if price does touch $4.06.  If price crashes through $3.95, I would wait to see if it would descend to the long term 200dMA before picking up more.  The 200dMA is now at $3.80.  Good luck to fellow shareholders.

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