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CapitaMalls Asia: Rebounding.

Tuesday, August 30, 2011

At this point in time, the recent upmove of CapitaMalls Asia's share price is still a rebound. The MACD made a bullish crossover with the signal line but momentum is still negative. Make no mistake. The downtrend is still intact.

Volume has been declining over the last three sessions. How do we interpret this?

Although the bears were roughed up three sessions ago, bulls seem to lack conviction in following through. We can only wait and see if they do in the next session. For now, bears are staying sidelined, nursing their wounds, while bulls remain somewhat cautious.

Price touched a high of $1.375 in the last session which coincides with the resistance presented by the 50dMA. Overcoming this resistance could see gap fill at $1.395 and that is where I have put in my next sell order.

If we look at the orange line I have drawn, we will see that $1.395 also approximates the immediate downtrend resistance in the next session.

Breaking the immediate downtrend could send share price higher to test resistance provided by the declining 100dMA which is currently at $1.52.

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Raelynn said...

hello ak,

wahhh i was reading googling your post on the aims rights issue price (forgot the price) and found my first post here on ASSI. it has been 1.5years since that post. how time flies..... *wistful look*

one thing that annoys me to no end is that poems/phillips does not include the rights issues etc, which makes the p/l and calculations quite misleading, i keep forgetting that i had some lots that were distributed during the rights issue.

i'm slightly confused over some of the terminology, although there may be an apparent downtrend of CMA, it doesnt mean that it will necessarily "bottom out" would it? do small capital investors have the luxury of buying at supports and selling at resistances??

AK71 said...

Hi Raelynn,

Yes, my blog is approaching two years of age and you are one of the first to comment in my blog in the early days. ;)

I don't know if there is an online trading platform that actually takes into account rights issue and update our portfolios automatically. Mine doesn't. :(

CMA's downtrend is intact and this means that unless the downtrend is broken in the coming sessions, it has not bottomed. Even then, would it be an interim bottom? If so, it would only be a floor and no the long term bottom. ;)

Buying at supports in a downtrend would only makes sense if there are signs of a possible rebound. Small or big investors or traders, I think the rule is the same.

If there is no sign of a possible rebound, chances are price would go lower and I won't buy.

So, it is not a question of how much capital we have per se. If the technicals show promise, I would buy some.

Uptrend or downtrend, if the technicals are supportive, we always buy at supports and sell at resistance. :)

FoodieFC said...

hi Ak

can I check how do i learn how to determine support and resistance?


AK71 said...

Hi FoodieFC,

This is really TA101 and you are better off getting a book to start you off. The Dummies series is actually very readable and I started off with books in that series too.

If you wanna start right now, you could visit Investopedia, an online resource that is free which I find invaluable even today. Happy reading. :)

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