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NOL: Moving average envelope.

Monday, June 6, 2011

NOL suffered heavy selling today and touched a low of $1.71 before closing at $1.73. Such an intense sell down could see a follow through the next day.

However, it is interesting to see that despite the heavy selling pressure, we still have the potential for a positive divergence to form. Much would depend the price action in the next session.

The lower range of the moving average envelope should provide some support at $1.68 in the event of further selling down. Any recovery in price could see gap cover at $1.82. The way I look at it, anyone who is still thinking of shorting NOL at the current prices should think twice.

I would probably add to my long position by purchasing at $1.68 if it should be tested as support. Downtrends are rivers of hope.


ortho said...

Hi AK71
May I know for how long you would keep NOL? Yr target sell price would be 1.82, while if it travels below 1.68, u wil still accumulate? :D

AK71 said...

Hi ortho,

I would divest at resistance on rebounds. That's a rule of thumb for me.

I would buy at supports if technical indicators suggest that downside could be limited. So, whether I would accumulate on weakness would really depend on the technicals. ;)

ortho said...

Hi AK71
Thanks. If I were to understand you correctly, you have placed in yr buy Q for 2ml at 1.68, right? :P

AK71 said...

Hi ortho,

Yes, I have put in a buy order at $1.68. :)

Anonymous said...

Hi AK71,
This is a highly "cyclical stock". In the old days, the cycle is about 3 to 5 years economic cycle. i had ridden the "cycle" and made quite a sum in the past because i used CPF's money which i could see but couldn't touched; so my CPF's capital was suitable for the ride at that time.
This present cycle, i have given a missed because of changing my mind-set of capital-expansion to capital-preservation investment; because i am already 63years old. If not i would make quite a substantial sum even at today's price. But i have no regret for i can sleep soundly at night. Anyway i still make some money.
When you are old, very seldom you get a second chance to try. That's the reason.

AK71 said...

Hi Temperament,

You are right, of course. Shipping is very much cyclical and if we are to believe the reports, container shipping is still in recovery mode compared to bulk shipping, for example. I would, however, take such reports with a pinch of salt.

You are also right as, logically, as we reach retirement age, we should be more risk averse. An avoidance of cyclicals and a shift towards more predictable forms of passive income generation is probably conventional wisdom. It is time to enjoy the fruits of your labour. :)

FoodieFC said...

Hi AK71

could i check the how do you gain access to these graphs for your TA? such that you can see if oversold or overbought, and the RSI?

thank yo.

AK71 said...

Hi FoodieFC,

You could download ChartNexus free of charge. The version I use comes free with my brokerage account with Lim&Tan. Have fun. :)

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