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Golden Agriculture: Long term uptrend is intact.

Monday, April 25, 2011

I have felt bulllish about crude palm oil (CPO) since 2009 and made some money divesting my investment in Golden Agriculture in 2010 when its share price shot through the roof. With the fundamentals of CPO still strong and likely to strengthen with the higher price of crude, I am convinced that Golden Agriculture will do better in time and I traded its shares on a few occasions as well.

However, I refused to chase as Golden Agriculture's share price rose higher and hit a high of 83c on 4 January. In fact, I was warning readers of the glaring negative divergence which saw the MACD forming lower highs and the share price formed higher highs. Patience will be rewarded (usually) and today I got back in on the long side once again at 67c/share which is where we find the rising 200dMA.


If we remember how in the last two occasions when the 200dMA was tested, it failed to hold up, we would treat any buying at this support as a hedge. So? A smallish long position just in case it does hold up. Put in a larger buy position at the trendline support which I have drawn in red. This is a long term support which started on 26 May 2010. If this were to fail, the next long term support is the one which originated at the bottom on 28 Oct 2008. This trendline support, I have drawn in orange color. I will accumulate if there should be further weakness.

2 comments:

ortho said...

Hi AK,
What's yr ideal price to accumulate? 65c or 67c? :D

AK71 said...

Hi ortho,

Well, ideally, 65c. ;)

However, 67c is a nice enough hedge. I am in the buy queue at 65c in case it should be tested. :)

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