Posts
Having added to my long position in China Minzhong recently, believing that it was not a time to sell, I am pleased to say that I seem to be on the same page as Mr. Market now.
I added more to my long position today as share price broke resistance provided by the 20dMA at 57c on the back of very high volume in the morning. Volume is the fuel that drives rallies and the high volume breakout could see some follow through.
Fundamentally undervalued, China Minzhong was, technically, also very oversold. However, with the relentless selling by Mr. Market and decline in share price, the technicals are pretty damaged and it would take some time to repair.
The share price is in a downtrend; there is no doubt about it. Drawing a trend line shows us where resistance could be found over time in the event of a price recovery. Shortists who might have covered their shorts today could come out of the woodwork once the share price is at resistance.
In the meantime, the rising momentum oscillators suggest that selling pressure continues to ease and if buying pressure should continue to overcome the sellers, a test of trend line resistance is on the horizon.
The resistance provided by the declining 50dMA is something to watch out for as, if I were to hazard a guess, sellers would be out in force then. Immediate support is now provided by the 20dMA, formerly resistance at 57c.
Related post:
China Minzhong: Too cheap to sell.
Bloggy Award
4 comments:
yeah man! i am equally vested as you :)
can i know how you draw the dotted lines as support/resistance lines in ChartNexus?
AK
Thanks for this heads up.
Made SGD7k in a week!
Thumbsup*
Hi KISS,
Love the nick. ;)
I use a combination of MAs and candlesticks to determine the supports/resistance. They are just estimates. :)
Hi JCK,
Hey, nice trade! I am glad you made money and not a small amount too. :)
Post a Comment