Golden Agriculture: Inverted black hammer.

CPO price has been in a downtrend since forming a double top in March this year. Following this, Golden Agriculture's downtrend started in early April. We have to remember that this company remains most dependent on CPO's price as it derives most of its profits from upstream activities. So, weakening CPO price is a big negative for it.

Resistance provided by the 100dMA proved too strong to be taken out and price formed a lower high at 55.5c on 21 Jun. In the last session, volume expanded as an inverted black hammer was formed, closing at the 52c support provided by the 20dMA.

MFI has formed a lower low, suggesting a lack of demand for the stock in the immediate term.  OBV has turned down. Clearly, distribution is taking place.

If the 20dMA support fails, using Fibo lines and drawing a trendline support from the low of 25 May, we derive an immediate downside target of 50c which happens to be a round number too.

The fundamentals are not supportive and the technicals are not strong. Cautious market participants who have resisted the temptation to buy in recently on a possible breakout at 55c should be breathing a sigh of relieve.


Related post:
Golden Agriculture: Resistance remains at 55c.

FSL Trust: Land ahoy?

On 18 June, news of the release of Verona I was greeted with some relieve.  However, price has closed unchanged at 38c since. I expect Nika I to be eventually released as well but would this be enough to reverse the fortunes of FSL Trust's unit price?

Obviously, FSL Trust is still in a downtrend.  Is the current phase forming a floor or a base? Would the declining 20dMA push the price down further? These questions are hard to answer definitely.  However, TA can provide some clues as to the psychology of market participants.  Let's see.

The MFI has been rising since 7 May.  This happened as the price continued its decline. MFI is derived from the combination of price and volume. A rising MFI is a sign of demand as money flows into a stock. Looking back, the MFI was declining from March to April this year while the unit price of FSL Trust was rising.  That negative divergence was a warning sign as smart money was flowing out of the stock. Another reason why I was warning people to stay away from FSL Trust back then. The opposite is happening now with MFI rising, money is flowing back into the stock as price declined.

OBV has been rising since 11 June and this suggests that accumulation is back. All this while, the RSI has been more or less flat and hugging 30%, no longer oversold.  This suggests that the speed at which the stock is being sold down is very much slower or, indeed, has stalled.

Immediate support is a band between 37.5c to 38c.  Immediate resistance is at 40.5c.  If price retests the recent low of 36c, I would pay attention to the volume.  If it is much lower than what was achieved on 11 Jun (5.64m units), we could have the first hint of a bottom.

Related post:
FSL Trust: Verona I.