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CapitaMalls Asia: To buy on possible weakness.

Monday, March 26, 2012



There is a rather obvious negative divergence between price and the MACD. Higher price was achieved with a lower high on the MACD recently. So, we should not be surprised if the share price should decline in the near future as positive momentum in the short term weakens.



However, look at the OBV. There is no sign of smart money retreating as price rose. In fact, it is scaling higher. This suggests that smart money could use any price weakness as an opportunity to buy.

Indeed, if we look at the weekly chart, there is no sign of a negative divergence. The MACD is rising higher into positive territory. The longer term technicals definitely have a bullish bias.



However, with the share price nearing the declining 100w MA which is at $1.71 now, the near term weakness is not unreasonable. The 100w MA is expected to provide some strong resistance.

With the OBV rising, any pull back in price to supports is likely to be a buying opportunity. The pull back should be on the back of declining volume to make the case for buying more compelling.

Of course, the counter could decide to do a correction using time instead. That would be most annoying but that is Mr. Market.

Related post:
CapitaMalls Asia: Going XD on 23 April.

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