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On 12 March, in a post titled, "Golden Agriculture: Waiting for support", I said that "The ascending 20d and 50d MAs have merged and should provide initial support at 55c. I have also drawn a line connecting the previous two lows which would give an indication of where the trendline support is in the next session, 54c. If this uptrend is violated, the ascending 100dMA would be called upon as support, 51c."
These observations are more or less still valid except that the trendline support is now higher up at 54.5c which also coincides with the gap support. Interestingly, 54.5c has been a gap support and gap resistance in the recent past before 5 March. It is also a many times tested candlestick support and resistance level. This implies that it should be a strong support if tested.
Golden Agriculture's price retreated 1c today to close at 56c. This is after starting at a high of 57.5c in the morning. So, we have a wickless black candle today. Very bearish. The MACD looks set to make a bearish crossover with the signal line.
Expecting further weakness in price, I am ready to accumulate at supports. However, if the price breaks through all the near term supports I have identified including 54.5c which I expect to be a strong support, I would wait to buy more closer to the rising 100dMA which would be around 51.5c next week.
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4 comments:
Hi there... Interesting post you have here.. However, may i know how you derieved your support level at 0.545, 0.550 and 0.555 respectively?
Hi Anonymous,
If you refer to the chart above, 20dMA provides support at 55.5c, 50dMA at 55c while gap support cum trendline support is at 54.5c. :)
i see.. Neat! Like it... =)
Hehe... I am happy you like it. Pretty neat, I agree. If you are starting on TA, there are some pretty good books out there. I started with the DUMMIES series. You can see two of them in the box "Books I've read" in the top right hand corner of my blog.
Thanks for visiting and come back often. :)
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