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Golden Agriculture: Immediate price target in a rebound.

Sunday, February 27, 2011

On Friday, I mentioned that it is encouraging to see Golden Agriculture going above the 200dMA (currently at 63.5c) and wondered if breaking support earlier was just a whipsaw. So, is it time to go long here?

Well, the downtrend that started on 4 January is still intact. The MACD histogram shows a short term bullish bias. MFI and RSI are both turning up in oversold territories. The ADX is flattening which suggests that the downtrend has weakened although still in force.

If I were to enter for a quick trade, I would buy as close to the 200dMA (63.5c) as possible. In a downtrend, sell at resistance and the immediate resistance would be provided by the 20dMA which approximates the downtrend resistance at 69c. So, there could be a 10% or so upside.

The MACD is still declining in negative territory which suggests that any upward movement in price could just be a rebound. To err on the side of caution is probably prudent.

Related post:
STI up 1.8%: Out of the woods?


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