Genting SP: Staying cautious.

The cautious tone in Genting SP continues today. There is talk that speculators have moved from Genting SP to Genting HK, contributing to the latter's spectacular run up in price.

Technically, the negative divergence between price and action here is rather glaring. Price has detached from the upper Bollinger and moved sideways. This could be the start of another consolidation period.  The detachment from the upper Bollinger is accompanied by reducing volume which is a good sign for the bulls.

Look at the MACD and we see it still rising above the signal line in positive territory.  Bulls want to watch out for signs of a bearish crossover with the signal line.

The MFI, although declining, formed a higher high before doing so and is still above the longer term uptrend support. OBV has flatlined in the immediate time frame but its longer term rise is unbroken.  Demand and accumulation seem healthy.

For anyone with a long position here, congratulations but look to the support at $1.70 for guidance.  If this support breaks, it might be a good idea to take some profit off the table as the next support is at $1.50.

Related post:
Genting SP: Flip flop.

Genting Hong Kong +3.6%; Earnings growth priced in: UOB
Monday, 06 September 2010

© 2010 - The Edge Singapore

STI climbs 1.1% to 3,034.58 at closing
Monday, 06 September 2010

© 2010 - The Edge Singapore

China Hongxing: Pushing upwards.

On 3 Sep, I suggested that China Hongxing might be taking a break with the near term resistance at 18c. Today, volume expanded significantly as the 18c resistance level was demolished.

Momentum oscillators are trending higher, forming higher lows.  The MFI's rise shows strong demand while the OBV's upward climb shows accumulation continuing. The MACD is still rising above the signal line in positive territory and the distance between the two is growing, a sign of strength.

On the flip side, the RSI is going into overbought territory, suggesting that the buying momentum is getting somewhat overdone.  Jumping in at this juncture to go long might be a risky proposition as the immediate upside target identified some time back at 19.5c seems within reach.

If price action starts detaching from the upper Bollinger and if the MACD's distance from the signal line starts narrowing, we could be seeing precursors of a reversal. So, we have to stay cautious and keep our eyes peeled.

Related posts:
China Hongxing: Taking a break.
China Hongxing: Retesting resistance.