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The STI experienced a nice up day as it closed 1.9% higher at 3,067.60. Golden Agriculture closed higher as well, breaking the immediate resistance of 68.5c, touching a high of 71c before closing at 70.5c.
I have closed my long position bought at 64c yesterday at 68.5c and 70c today, locking in a one day gain of 7% and 9.4% respectively. For those who have yet to close their positions, the next resistance levels are at 72c (100dMA) and 73.5c (50dMA). Having broken out of the downtrend which started on 4 Jan on the back of a high volume white candle day, there is a chance that price could go higher. Then, why did I choose to close my position?
A one day gain of 7% to 9.4%, risk free, is good enough for me. There could be another 2 or 3c gain from here but the risk is definitely higher now. 68.5c is also a natural price level for partial divestment as it approximates the position of the downtrend resistance, on top of being the price where we find the 20dMA.
A look at the weekly chart shows that 72c is likely to be a strong resistance. Notice also how the MFI and RSI are forming lower highs and lower lows. We could be experiencing a very strong rebound and when the energy is spent, price is probably heading lower.
STI increases 1.9% to 3,067.60 at closing. Golden Agri Resources surged 8.5% to 70.5 cents. UOB-Kay Hian Holdings raised its rating to “hold” from “sell,” while HSBC maintained its “overweight” recommendation and cut its share-price forecast to 81 cents from 90 cents.
Tuesday, 01 March 2011
Tuesday, 01 March 2011
© 2011 - The Edge Singapore
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2 comments:
I did a 1-day contra too but no where near your gain of 7% because I bought near the high of yesterday expecting it to break out even more :)
Congrats!
Hi Chu Yeow,
Made money! That's the important thing, right? Happy for you. Congratulations! :)
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