Healthway Medical: Finding support?

To say that Healthway Medical's uptrend broke down a few sessions ago is to state the obvious.  The 20dMA is a support turned resistance at 16.5c.  So, it makes sense to reduce exposure at resistance and to re-enter at support in such a situation.  That time for selling at resistance has come and gone.

If you remember, I said I am waiting to see if the supports hold and to wait for a better time to add to my position.  You might also remember that I said I look at 15c as an important XR support level and that I am almost sure that the 50dMA support at 14c would hold, if tested.  A regular visitor to this blog, CL, asked if it would reach 13c which is where we find the 100dMA.  This, I said, is possible but less probable.

Healthway Medical's price action formed a dragonfly doji to close at 15.5c today on even lower volume.  The dragonfly doji is a bullish candlestick.  It seems that the 15c support is not calling it quits and is holding up quite well.  Added to this is the very low volume which confims that the sell down lacks conviction.  MFI formed a higher low and has turned up.  Watch the green line I have drawn beneath the MFI.  We want to see the MFI forming higher lows for the price to move up convincingly.

Any move up in price would meet with initial resistance at 16.5c, the 20dMA.  Breaking resistance at 16.5c could see the price testing the recent high of 18.5c, which is probably a strong resistance level.  Breaking this would probably see the XR eventual target at 21.5c tested.

I drew a trendline in orange color on the price chart.  Trendline resistance is at 15.5c.  If price action breaks this line soon, it is good news for the bulls.

Strategy: 15c support is holding up, it seems.  Entering at this level is quite safe since the next support level is only 1c away at 14c.  Limited downside and a nice upside.  I have put in my buy queues for tomorrow.  Always hedge and don't be too greedy.

Golden Agriculture and Saizen REIT

Golden Agriculture (50.5c): Unable to close above the 50dMA today at 52c is not a good sign.  Trade volume although not expanding very much remains significant.  The fact that the MFI is bordering on the oversold region provides little comfort as it could stay oversold for a while if sentiments remain bearish.  Once again, the critical support level at 50c is in focus.  Investors with long positions in this counter like myself would want to see this support level holding up.  Fundamentally, the prospects for crude palm oil (CPO) in 2010 remain positive.  The price of crude oil will also appreciate in time as economic recovery this year gains traction on a global scale.  Golden Agriculture will remain a major beneficiary in such a situation.

Saizen REIT (16c): Another low volume day with the MFI bouncing at the 50% mark.  There is little to say here.  I am still in accumulation mode where this counter is concerned.