Golden Agriculture: Eyeing 96c per share.

Are you rubbing your eyes? Are you pinching yourself? 96c per share for Golden Agriculture? What's the price now? 67c per share. Wah! Quick, put in a buy order for Wednesday! Wait a minute, who came up with that target? OCBC Research. The link is provided here:

OCBC ups Golden Agri price target, keeps buy.OCBC said it raised its earnings forecast for Golden Agri by 22.7% for this year to reflect improving margins and after it reported strong quarterly results.
Monday, 16 May 2011

© 2011 - The Edge Singapore

I have been bullish on crude palm oil for a long time and, in recent weeks, I increased exposure to Golden Agriculture. The long term uptrend is intact and if anyone is thinking of going long here, the long term support provided by the rising 50wMA is currently at 65.5c. I believe that this is a relatively safe entry price if it should be tested again. If it were to break, the next support is provided by the rising 100wMA at 57.5c this week. That is some way to fall. So, one has to be mentally prepared.

The share price has been trapped between the 20wMA and the 50wMA for more than 4 weeks now. It could be due to the spectre of the sharply declining 200wMA. Could it force the price of this stock downwards? It could but it is also interesting to note that the rising 50w and 100w MAs would probably form golden crosses with the falling 200wMA towards the end of 3Q 2011 or early 4Q 2011. So, stronger performance in the next few months could be on the cards as per OCBC Research's opinion.

On the weekly chart, it is easier to see that a symmetrical triangle is forming. A symmetrical triangle is usually a sign of price consolidation. A break below the support on high volume could see the next support provided by the rising 100wMA tested. A break above the resistance on high volume would be good news for the bulls. However, expect resistance at 70.5c and 72c thereabouts to weigh in before that.

The outlook for crude palm oil is benign. Demand from India and the Middle East will likely pick up ahead of Ramadan, underpinning prices. China may also need to restock in the coming months. Source: Dow Jones Newswire, May 16, 2011 07:46 ET.

My strategy to accumulate on any weakness remains unchanged.

Related posts:
Golden Agriculture: Excellent results.
Golden Agriculture: A picture says a thousand words.
Golden Agriculture: Accumulation mode.