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I have not done any trading for a long time. Today, I took a look at Raffles Education's chart and it looks to me like a positive divergence is forming between the downtrend in price and the MACD. As price formed lower highs, the MACD has been forming higher lows. Last week, a higher low in price was formed. This is a positive sign.
Look at the MFI and we see higher highs which suggest increasing demand. Look at the OBV and we see accumulation strengthening. Look at the RSI and we see higher highs which suggest positive buying momentum. These signs point towards a possible reversal of the downtrend.
Also, as price declined in the recent sessions, volume similarly declined which suggests that a classic low volume pullback is taking place. There is an absence of strong selling pressure.
Having said all these, immediate resistance at 29.5c has to be taken out convincingly. If this is achieved, I see an eventual target of 34c (161.8% Fibo and also defined by the descending 200dMA) with some resistance at 32c. Good for a trade? Perhaps.
Related post:
Raffles Education: Downtrend in force.
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8 comments:
I actually invested in Raffles Education while it's on it's long-term downtrend and have cut loss on about half of my investment.
Anyway, I don't really have much to add except my regrets on being greedy with this stock. I'd entered it when it was around 38 cents for a punt and got greedy and didn't sell all away when it hit a high of ~47 cents. Good lesson though :)
Hi Chu Yeow,
This might be a chance for you to get even. Haha... Kidding. Should not go into a trade with revenge on our minds. ;p
I am wondering whether is it too late that we spot the bullish divergence now. Cause the bulish divergence occurred when the price is at around $0.28.
However, if the price hit $0.31. It will complete a cup formation and it is likely that it will breakout.
Hi Ao,
You could well be right. :) After all, TA only shows probabilities, not absolutes. I am still very much a student of TA. ;)
I also looked at their fundamentals quickly last night. It seems that things have stabilised for the company and seem to be looking up. This perhaps explains the accumulation of their shares in recent weeks? I can only guess at the reasons, at best.
Hi AK71,
Do you have any recommendation on how do I go about learning fundamental analysis?
Hi Ao,
Here are a few links:
http://singaporeanstocksinvestor.blogspot.com/2010/02/fundamental-analysis-income-statement.html
http://singaporeanstocksinvestor.blogspot.com/2010/02/fundamental-analysis-balance-sheet.html
http://singaporeanstocksinvestor.blogspot.com/2010/02/fundamental-analysis-cash-flow.html
and this is a great book to start with:
Warren Buffett and the Interpretation of Financial Statements
Happy reading. :)
Peter Lynch's One Up on Wallstreet is easy-reading and yet a gold mine of basic FA knowledge :)
Invest in what you know is the basic theme behind the book.
Nick
Nick,
Invest in what you know. That is good advice which I very often dish out too. Thanks for this. :)
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