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Golden Agriculture: Looking to the 100dMA.

Thursday, January 20, 2011

Golden Agriculture's share price continues to weaken with a gap down today forming a wickless black candle on heavy volume. Price closed at 74c which seems to be a relatively strong support in the immediate future. Some asked if I would consider buying in at 74c. I don't think so.

Of course, price could rebound after a hard sell down. The RSI has entered the oversold region with the MFI just bordering on oversold. However, look at the OBV which shows sharp distribution and this could continue as the MACD dipped into negative territory. If a rebound happens, it would probably do a gap cover to 76c where it would meet with resistance.

On 15 January, I asked "How low could the price fall to? No one can say for sure but drawing a trendline support linking the lows of 30 Sep and 8 Oct coincides with the rising 100dMA and, to me, this suggests a much stronger support at this level and would be a more ideal entry point. The 100dMA is currently at 68.5c." The 100dMA is closing in on 70c and that is when I might consider adding to my long position if there are clearer signs to do so, not sooner.

Related post:
Golden Agriculture: Short term uptrend broken.


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