Genting SP: Is the uptrend still intact?

I have heard so many accounts of people who went into Genting SP as it was forming new highs in the last three months of 2010 because they did not want to miss out on the action. Here, in my blog, a reader mentioned that he went into Genting SP as well as he saw his friends making so much money from the stock. I hope that most of these people were nimble enough to make some money and close their positions. I said "most" and not "all". This is being optimistic, I am sure.

On 18 November 2010, I sounded an alarm, "The negative divergence between price and the MACD is playing out. With the MACD approaching zero, momentum could quickly turn negative as the lower highs on the RSI suggest weakening buying momentum. If price does not recapture the 50dMA as support, immediate support is at $2 with the next support after that at $1.85."

Also, in my various blog posts regarding Genting SP in the last few months, I kept hinting of further downward movement and I kept mentioning $1.85 as a likely downside target. Is this really going to happen? No one can say for sure but the downward bias is quite obvious.

For anyone who has long position using leverage of some form, this could be a worrisome scenario. A fall from the current $2.07 to $1.85 is a 10% decline. Quite substantial. For those who are vested at higher prices, it could be doubly worse.

These are the support levels to watch:
$2.04 - Short term candlestick support.
$2.00 - Low of 31 January 2011.
$1.92 - Low of 24 November 2010.
$1.85 - Likely downside target.

Remember that these are the supports which I have identified. It does not mean that they would definitely be tested. The question to ask is what would you do if these supports held up or if they were breached?

If you believe the analysis by AmFraser (appended at the end of this blog post) that the uptrend is intact, buying at supports in an uptrend is the way to go. If we look at where the 200dEMA is, the uptrend is intact. However, the 200dEMA is a long term MA. So, we should say that the longer term uptrend is intact but the fall to that long term MA is quite a distance.


Related post:
Genting SP: Bearish engulfing candle.

AmFraser analyst Najeeb Jarhom says recent downward pressure on Genting Singapore (G13.SG) “should not endanger” the stock’s recent uptrend so long as the price holds above the key $1.84-$1.92 breakout points. 
Tuesday, 08 February 2011

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