Golden Agriculture: To sell or to hold?

When I divested my small trading position recently in Golden Agriculture at 68.5c and 70c, I made the following comment: "A one day gain of 7% to 9.4%, risk free, is good enough for me. There could be another 2 or 3c gain from here but the risk is definitely higher now.....A look at the weekly chart shows that 72c is likely to be a strong resistance. Notice also how the MFI and RSI are forming lower highs and lower lows. We could be experiencing a very strong rebound and when the energy is spent, price is probably heading lower." See blog post here.

Someone asked me today what should he do as he did not divest and was hoping that price would go higher. I told him I do not have an answer for him. He has to decide for himself to hold or to sell. I can only describe what I see in the charts and where are the supports and resistance.

What am I doing? I am waiting for a chance to go long on this counter again and I have yet to spot a fairly good entry. The counter is still in a downtrend. Although it broke out of a primary downtrend that started on 4 January, it is now in a secondary downtrend if we join the highs of 4 Jan and 4 Mar.

The immediate support of this secondary downtrend is the declining 20dMA which was tested today. It is crucial that this support holds up, otherwise we could see support at 200dMA tested sooner than later and this is currently at 64.5c. Forming a lower high would confirm the secondary downtrend.

In a downtrend, selling at resistance is conventional wisdom.


Related post:
Golden Agriculture: 72c resistance.