Capitaland: Leveling up.

"People’s Bank of China slashed its one-year deposit and lending rates by 25bps and 31bps respectively just a month after it cut interest rates by 25bps. Beijing also announced further easing of interest rates, with banks expected to lower lending rates by as much as 70% against benchmark rates." Further expectations are for the bank RRR (required reserve ratio) to be cut by another 50bps in 3Q 2012.  (Source: The EDGE)

All these measures would serve to improve liquidity, helping businesses and consumers gain easier access to cheaper loans. As Capitaland has a significant presence in China, improving liquidity in the country will only benefit its projects over there.

Capitaland's share price has been climbing steadily higher on the back of higher volumes. This has attracted the attention of bulls and bears alike. Yes, undoubtedly. Although bulls are enjoying the ride, at the first sign of weakness, bears would rush back in.

Volume is the fuel that drives rallies. With the high volume seen, we won't be wrong to expect price to possibly go higher. Now, how high can the share price go? No one can say for sure. Bummer!

However, what I can say is that price has touched a major resistance, a many times tested resistance. People who bought at this level during the period of 11 April 2012 to the first few days of May 2012 could be looking to break even. The desire to break even is why this resistance is likely to be a tougher one.

The bullish momentum has to be strong enough to break through the barrier decisively. Any hesitation by the bulls will bring back the bears. Even as the OBV suggests that accumulation is powering on, there is no sign that the counter is overbought on the MFI.

Managing to break the immediate resistance could possibly see the double top formed in February and March 2012 tested. This is at $3.15. Incidentally, the 150% Fibo line approximates this price level as well which adds to the expectation that this resistance could be a stronger one.