Golden Agriculture: Breaking support.

CPO price is at RM2,735, up RM34 or up 1.26%.  All CPO counters are up with the exception of Golden Agriculture which is affected by bad press.  It could potentially lose more customers.

On 25 Sep, I mentioned that "with the recent bad press and uncertainty as to whether things would worsen, it might be better to err on the side of caution and to stay sidelined".  Support at 57.5c gave way in this session as the counter closed at 56.5c, forming a bearish engulfing candle. Volume more than tripled compared to the previous session, a white candle day which I described as lacking in conviction.

The MACD continues plunging, increasing its distance from the signal line, as it heads towards zero.  MFI and RSI both formed lower highs with the latter breaking 50% as it heads lower.  OBV shows ongoing distribution. Technically weak, this counter could head lower unless there is some positive catalyst.

Next support level is at 55c, where we find the 100d and 200d MAs.  I have divested my remaining stake at 57.5c as the support broke and will wait for the dust to settle before deciding on re-entry.

Related post:
Golden Agriculture: Stay cautious.

Golden Agri down 0.9% as RSPO’s concerns weigh. Companies like Burger King, Nestle, Unilever have already stopped doing business with Sinar Mas following Greenpeace’s allegations of destructive planting practices.
Monday, 27 September 2010

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