Golden Agriculture: In full retreat.

I last blogged about Golden Agriculture on 31 January and I mentioned that "TA is not about having a crystal ball and knowing exactly what would happen but TA is useful in that we would know exactly what to do if something happened.  So, in case price moved higher to 73c, I would reduce my long position. In case price moved lower, I would wait for it to go closer to the 200dMA at 63c before adding to my long position. That's my plan."

The counter's share price did move higher in subsequent days to test the trendline resistance and even whipsawed out to touch a high of 75c before retreating once more. Have you reduced your long position?

When to go long again? Well, if you believe that the outflow of funds from the emerging markets to developed markets is a temporary phenomenon and if you believe that crude palm oil will cost more in 2011, buying into Golden Agriculture at lower levels makes sense.  The 200dMA is now at 63.5c while the 200dEMA which gives greater weightage to more recent prices is at 66c. I could tiptoe into the stock then.

Tiptoe? As the overall technical picture is still rather bearish with the formation of a lower high as well as a most certain lower low, any long position without a definite picture of positive divergence is a hedge at best.

Related post:
Golden Agriculture: Resistance at 100dMA.