NOL: Fundamentals and technicals.

NOL's decline in price came to a halt as news of falling price of crude oil gave a boost to the share prices of transportation companies. NOL should also benefit in time from the "tight capacity of container boxes as well as almost full deployment of container ships (which) would make freight rates very sensitive to any upturn in demand." Could we be seeing the early days of a reversal?

Citi cuts Neptune Orient target price, keeps buy
Friday, 06 May 2011

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Well, I bought into NOL at $1.95 and $1.90, believing that it was range bound with support at $1.90. We know what happened after the counter went XD. Price went on to touch a low of $1.80 two sessions ago, confirming that the counter is still in a downtrend. If price were to rise from here, where would the resistance levels be?

Employing a Fibo fan with high at $2.40 (5 Jan 11) and the low at $1.90 (17 Mar 11), it is clear to see that the 38.2% Fibo fan line provides a credible resistance but it was overcome on a few occasions. Therefore, I would expect the 50% Fibo fan line which coincides with the declining 50dMA to provide a stronger resistance if tested. The 61.8% Fibo fan line coincides with the confluence of 100d and 200d MAs and this could provide the ultimate limit to any upward movement in share price resulting from any possible bullish sentiments.

Although the share price has been declining, the MACD has not formed a lower low. Indeed a higher low looks likely. A higher share price with the MACD turning up could mean a test of those resistance levels identified. Good luck to fellow shareholders.