Golden Agriculture: Critical support at 67.5c.

Regular readers might remember that I was queueing to buy some shares of Golden Agriculture at 67.5c, having divested most of my long position not too long ago. The reason was because 67.5c was support in an uptrend which started on 6 May 2011.

Did I say "was"? Yes, I did. The uptrend which started on 6 May 2011 has been broken as price closed below the trendline support in the last two sessions.

As the ADX suggests a lack of trend, I look to the Stochastics for clues and it has been in decline. Indeed, it could decline further as volume reduced with price unable to close higher.  Price could continue to weaken. It might look like a low volume pull back but it is not pulling back to support but a break in support.

It would be better to err on the side of caution and seek guidance from the gentler uptrend which started on 23 Feb 2011. Using Fibo lines to complement this, we see supports at 66c (138.2% Fibo) and 65.5 (150%) if 67.5c should give way.

We could see the Stochastics dipping into oversold territory just like it did earlier this year in February and late April. It would be more timely to add or initiate long positions then.