Golden Agriculture: Which way would it go?

CPO price spiked 4.31% today or RM112 to close at RM2,708.  It is on track to challenge the previous high, it seems. Strong buying by Chinese purchasers and short covering were cited as the reasons.

Palm oil shipments to China will likely rise 3% this month compared with August, as low stock levels of around 400,000 tons at ports in China spurred buyers to increase purchases, a Beijing-based vegetable oils analyst said. 

-By Shie-Lynn Lim, Dow Jones Newswires,
September 17, 2010 06:55 ET (10:55 GMT.

Golden Agriculture's share price gained 1c to close at 59c today. This was, however, on the back of rather modest volume. I have suggested in earlier posts that its share price seems to be trapped in a symmetrical triangle. Immediate support is at 57.5c, a many times tested candlestick support and coincides with the rising 20d and 50d MAs. If this goes, 55c should be a very strong support as that is where we find the 100d and 200d MAs.  It is also where we find the uptrend support line now.  To move higher, price has to overcome resistance at 60c.  This is also where we find the upper line of the symmetrical triangle which would present some strong resistance.

Currently, the MFI and RSI are both bordering on overbought and OBV is flat. Technically, the picture is not strong. An appreciation in price on higher volume is required to break resistance at 60c, probably.  However, it would also push the MFI higher into overbought territory.  If this happens, I expect to find strong resistance at 62c.  This is a many times tested resistance level in April 2010 but ultimately proved too strong to be taken out.

Related post:
Golden Agriculture: Trading Buy by OSK.

ASTI: Breakout, almost.

A friend called me and asked if it is too late to buy some shares of ASTI.  Yesterday, I said "I see resistance at 12c which was tested several times in recent months.  It is, however, also interesting to note that we might be seeing the formation of an ascending triangle here with 12c being the top of the formation.  If  the resistance at 12c is taken out, I see immediate resistance at 13.5c with a near term target of 15c." Today, 12c resistance was weakened as price briefly touched 12.5c before ending the day at 12c.  This means that 12c is still resistance and we need to see if it could be taken out in the coming sessions.

So, should my friend buy some shares of ASTI at 12c? Buying at 12c would be buying at resistance. Not a very good idea. However, the very high volume today which accompanied the buy ups is encouraging.  Of the 20,050 lots that changed hands, 15,573 lots were buy ups. 10,369 lots were bought up at 12c.  Could this momentum continue? Let's look at the momentum oscillators for clues.

The MFI has formed a higher low.  So has the RSI.  The MFI is just going into overbought territory while the RSI has spiked into overbought territory.  OBV has also spiked upwards.  Demand is rising. Buying momentum is strong but overdone.  Accumulation is in full swing.  Overall picture looks good.  There is a good chance of a follow through and if it happens, we could see 13.5c tested.  Otherwise, supports could be tested once more. It would be safer to buy in then.

Related post:
ASTI: A doubling of share price in time?