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STI closed at 2,769.19, down 24.87 points. It is still within the uptrend channel and above its 100dMA. Volume is somewhat reduced and the downwards adjustment in the index is nothing alarming at this stage.
AusGroup looks interesting as volume continues to expand for a second day with price moving up to close at 58c today. MFI is rising strongly and is almost at 50%. MACD turned up and a bullish crossover with the signal line seems inevitable. Currently, the declining 20dMA is providing resistance at 59.5c. If the price action overcomes this, it could move to 64c which is the resistance provided by the 50% Fibo line. This is also the price level which the descending 50dMA seems on track to meet in the next few sessions.
Golden Agriculture experienced a down day closing at 55c on the back of reduced volume. MACD is poised to cross above zero which would herald the return of positive momentum. Gap support at 54c. My target price for this counter remains unchanged at 59c if the upmove should continue in the near term.
Healthway Medical's price action formed a gravestone doji today. This is a bearish candlestick. With the MFI and MACD turned up, the expectation is for some continuing push upwards but these momentum oscillators are lagging indicators. So, we have to take this with a pinch of salt. If price action does not close above the resistance provided by the descending 20dMA at 15.5c, we want to at least see the rising 50dMA confirmed as a support at 14.5c. All we can do is to wait and see.
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4 comments:
Hi AK71,
Gong xi fa cai and wish your family a Prosperous new year. Didnt get healtway @ 13.5c so shall wait next week and see. :) Anyway just read your previous post of teaching the basics of reading a financial report. thanks for the guidance as usual. :)
cheers
Hi CL,
Gong Xi Fa Cai. :)
Yes, continuing to wait for 13.5c seems to be a safe option. The chart lacks clarity at the moment and any purchase now is a hedge at best.
Just curious on y u like Golden Agriculture?
one of my friends like this stock too...so i ask him..is it noble, olam is a much better bet?
Hi Dou,
I picked Golden Agriculture because it is undervalued from a FA perspective. I compared it with fellow crude palm oil counters like Wilmar, IndoAgri and Kencana. I cannot recall the figures offhand but comparing the PE and P/B shows Golden Agriculture to be relatively undervalued. I also like the very low gearing.
You might also be interested to know that Golden Agriculture is the most levered to the price of crude palm oil. As I expect crude oil to continue rising in price over the longer term and crude palm oil's price moves in tandem with crude oil's, I expect Golden Agriculture to be a major beneficiary in such an instance.
I did not look at Noble and Olam in great detail. So, I cannot comment on these companies. However, the consensus is that these companies are very highly geared and the margins are super thin. These are volume businesses which are riding on the economic recovery story. Risk is very high and so is the corresponding reward if you catch them at the right time. Not for the faint hearted and so that leaves me out.
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