Golden Agriculture: A golden opportunity

Golden Agriculture confirmed the bearish signals seen yesterday with a gap down today. Opening at the psychologically important 60c level, it quickly turned that into a resistance level, resulting in a black candle day on rather high volume. Sell signal is confirmed on the MACD. The MFI continues to decline, moving out of the overbought territory in the process. The counter is no longer overbought but such black candle days usually have some momentum and the expectation is for a further decline in price. A major support level is at 54c.

Despite the fall in price, the uptrend for Golden Agriculture is still intact. I have drawn three trendline supports in blue, orange and purple colors. Comparing the high achieved just three sessions ago with the trendline supports, we get an idea of how the rapid rise in price was not sustainable. It would be nice to see the blue trendline tested sometime in the next few sessions and holding, failing which the orange trendline comes into play. With improving fundamentals, I do not expect Golden Agriculture to fall to test the purple trendline but, of course, nothing is for sure.

Strategy: This correction presents a golden opportunity to accumulate. Having divested 90% of my position at every resistance level on the way up, I will now accumulate at every support level on the way down.