3 bue chips and 1 REIT

Saizen REIT: Still trading sideways.  MFI has moved into oversold territory.  The quarterly report will be released tomorrow in the morning before trading starts.  Volume is very thin today as if everyone is waiting for the report before deciding on what to do next.

F&N:  Uptick in the MFI pushed the index out of oversold territory as the terribly oversold counter seems to have attracted some buyers.  Price action formed an inverted black hammer on respectable volume and has moved away from the lower limits of the Bollinger bands.  If this continues, the correction is over and we might see some consolidation.  Initial resistance is provided by a rising 200dMA at $3.83 followed by the 100dMA at $3.92.

Keppel Corp: MFI continues to rise and seems determined to form a higher high.  This is a positive as it signals the return of some buying momentum.  That the black candle day is accompanied by reduced volume today is also a positive.  As of now, the counter's uptrend is stil intact.

SPH:  A low volume day as price almost formed a white hammer.  MFI has turned up.  Let us see if the symmetrical triangle I talked about yesterday will deliver good news in time.

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Healthway Medical: Almost but not quite.

Healthway Medical looked as if it was going to lose its support at 14c at one point today as almost 10m shares were sold down at 14c and wiped out the entire buy queue.  However, no selldown took place at 13.5c and buyers came back to close the day at 14c. 

The 50dMA support has held up.  This is meaningful as not closing lower today has helped the counter to take the first tentative step away from the lower limits of the Bollinger bands.  It has also broken out of its downtrend resistance.  It is still too early to say if this means that the correction is over but it might just be an early sign.

MACD has crossed below zero, confirming that the upward momentum is well and truly over.  In the next session, if price continues to stay at 14c or higher, we could say more confidently that the counter might be moving into a consolidation phase.

Golden Agriculture: Reversal at hand?

Golden Agriculture is beginning to look more promising.  After forming a nice white candle yesterday which almost engulfed the preceding session's price action, it formed a short black candle today.  In charting terms, this is a thrusting pattern in which the price action moved in the opposite direction of the preceding up day but did not manage to go beyond the midpoint of the preceding white candle.   

The price action also happened on the back of reduced volume which confirms a lack of selling conviction.  MFI has formed a higher low and exhibits an upward bias, possibly indicating increased buying momentum.  The MACD's decline is abating and we want to see the distance with the signal line closing which will happen if a bullish crossover is going to take place.

Golden Agriculture is still trading above its uptrend support despite its price having corrected by more than 20% from its recent high.  That its correction is at an end is quite evident as it has emerged from its recent steep downtrend resistance.  It is consolidating and signs are that price might be getting ready for a move upwards.  Initial resistance is provided by the 50dMA and 20dMA at 52c and 53c respectively.  In an upward move, these resistance are likely to be swept away.  More meaningful resistance are at 55c and 59c.

Small, mid and large caps

The STI gained 51.4 points to close at 2,745.02 on relatively low volume.  This might have been the rebound that stale bulls were waiting for in order to reduce exposure in some index linked counters.

Healthway Medical closed at 14c today and it remains to be seen if this support would hold or would 13c, the next support, be tested.  The declining volume continues to confirm a lack of selling conviction and as the price declines, the chances of supports holding become higher in this light.  With the MACD declining and positioned just above zero, there is almost no doubt that the upward momentum is over.  MFI confirms this as it did not rebound off the trendline support today, confirming a lack of buying momentum.  Now, we have to pay attention to the Bollinger bands.  See how the price action has been hugging the lower limits of the Bollinger bands?  We want to see the price action detaching and moving inwards towards the 20dMA.  That would be the first sign that the correction might be at an end.  This would likely be followed by a consolidation phase.  Strategy: I'm holding on to my Healthway Medical shares and will add to my position again once I see signs that the correction has ended.

Price of crude palm oil (CPO) closed at RM 2,561 as it continues its upward climb after reaching a recent low of almost RM 2,400.  It looks likely that it will continue to rise and test the trendline resistance.  Given the current weak sentiments, a lower high would seem to be more probable.  Golden Agriculture seems to echo the relatively positive performance in CPO and closed at 51.5c, forming a white candle in the process.  However, this is on relatively low volume which makes the upward move in price less convincing.  This is echoed by the MFI as it stays flat, signalling a lack of buying momentum.  A flat 50dMA at 52c provides immediate resistance.  If this is taken out, a declining 20dMA provides a stronger resistance at 54c.  Strategy: Look to the MACD (blue line) for signs.  Once it closes in on the signal line (red line), that is a sign of a possible reversal.  Of course, to be safe, wait for confirmation as the MACD crosses above the signal line.

Saizen REIT ends at 16c on another low volume day.  There is not doubt that the counter is stuck in sideways trading but the uptrend is intact.  Let us see if the report due to be delivered in the morning of 11 Feb 10 will provide some stimulus here.  Strategy: Accumulate.

Keppel Corporation closed at $8.34 on a white candle day as it's resisted by the 50dMA.  It did manage to safely stay within its uptrend although the diminished volume does not make this convincing.  The overall picture is quite pleasing as the upmove today means that the low of $8.12 formed in the last session is a higher low.  Will the price break resistance tomorrow to test the recent high?  MFI shows that the buying momentum has an upward bias and bulls might breathe a sigh of relieve yet.

F&N today confirmed that it is indeed the weakest of the three blue chips I have been looking at in recent days.  The black candle formed today is accompanied by very much higher volume as price closed at $3.78.  MFI plunges deeper into the oversold territory and the MACD continues its descend and is pulling away from the signal line.  All these means that F&N is terribly oversold but such strong selldowns usually have some momentum.  It would be wise to wait a bit for some signs that the correction is over before going long.

SPH is, technically, the strongest blue chip here.  Today, I made an interesting observation.  Dare I hope?  It looks like a symmetrical triangle is forming in SPH's price action of late.  Look out for the MACD (blue line) closing in on the signal line (red line) as it might mean that it is ready to form a bullish crossover.  This would mean that price would probably break out higher .  With MFI forming a higher low, the buying momentum has an upward bias.  I guess a bit of hope doesn't hurt.