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Golden Agriculture: Watch the 100dMA.

Friday, May 27, 2011

Golden Agriculture had another high volume white candle day but price could not close above the declining 100dMA and a long upper wick was formed in the process. This is the second time in the last few sessions which saw the 100dMA broken but, ultimately, remains the resistance to watch.

Could we see price moving higher in the next session, overcoming resistance provided by the declining 100dMA? We could. Could we see price being pushed lower in the next session and perhaps retest supports? We could.

Huh? What am I saying? The usual and that is TA is about probabilities and not certainties. At this moment, the odds are 50-50 that it could go either way.

What have I done? Seeing strong resistance at 71c, the last high, I did a partial divestment today at 70.5c. If price were to weaken from here to retest supports, I would buy more. If price were to move higher, I have more to sell.

If price were to move higher, we could see 72c and 73.5c tested as resistance. Ultimately, we could see gap cover at 76c. Sounds good? However, if price were to move lower, expect immediate support to be at 69c, followed by 67.5c.

No matter how bullish analysts are, I would be cautious here as a possible head and shoulders formation is obvious in the chart. Therefore, without a higher high (i.e. higher than 73.5c), we are still on thin ice.

Related posts:
NOL and Golden Agriculture.
Golden Agriculture: Divestment at 70.5c.


Alan said...


Am considering to get vested in sabana, any advice what would be a good entry price? Thanks loads

AK71 said...

Hi Alan,

Of course, it would be best to enter at the lowest price possible. ;)

What is a good entry price? I think it would depend on what you think is a reasonable yield for you.

At 92c and a DPU of 8.81c, we get a distribution yield of 9.58%. If you think that is good enough for you, 92c is a good entry price. ;)

If you are investing for income, a test of the low at 90c would be an opportunity to add to your long position.

Always question your motivations and act accordingly. Good luck. :)

Alan said...

Hi AK,

Thanks for your advice. Wish u all the best for ur investments :)

AK71 said...

Hi Alan,

Glad to share. Good luck. :)

ortho said...

Hi AK,
Can I have your analysis for Golden Agr and CMA? How about Healthway? did not see you blog about it for some time :D

AK71 said...

Hi ortho,

I have been somewhat busy with quite a few other things lately. Although I enjoy blogging, I had to slow down somewhat.

Healthway Medical? Not much to say. I think you might want to refer to this blog post for my thoughts which have remained unchanged:

Healthway Medical: 1 for 8 rights issue.

Golden Agriculture's long term uptrend is intact and I would buy more at supports. Buying at supports in an uptrend is the way to go.

CapitaMalls Asia is still in a downtrend but there are signs that the selling pressure has weakened. Fundamentally strong but technically weak, one has to have a strong stomach and lots of patience for this one.

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