Golden Agriculture: Strong resistance.

I am still bullish on the long term fundamentals of crude palm oil. The more robust demand for the vegetable oil in emerging economies, especially in China and India, will provide a floor to any correction in price.

A correction? Yes, prices do not go up in a straight line. If prices do move higher, they climb a wall of worries.

The share price of Golden Agriculture is finding it hard to move higher than 68.5c in recent sessions. If we take a look at the daily chart, it becomes clearer why this is so. 68c is where we find the merged 20d, 50d and 100d MAs.

Volume has been relatively thin and we have to bear in mind that share price is moving closer towards the apex of a symmetrical triangle. If volume does not increase with an accompanying push to move price higher, we might see support at 66c broken and price moving lower.

If price were to retest support at 66c, I could buy more shares in the company but it would be a smallish purchase in case price were to move higher. A trend is not over until it is over, after all.

In the meantime, keep an eye on the strong resistance at 68.5c. If that were to be taken out convincingly, we could see 70c next.

Related post:

Golden Agriculture: A steeper trendline resistance.

Selling shares of Capitaland and CapitaMalls Asia.

I did a contra on the shares bought earlier in the week for Capitaland and CapitaMalls Asia yesterday. To me, the way in which the share prices were moving higher on lowering volume did not look sustainable.

Downtrends are rivers of hope, no doubt, but I would not get too hopeful especially if the technicals hint of a weak rebound. Lock in some gains and let others take on the higher risk of holding the shares in the downtrend.

If prices should go higher, congratulate the buyers. They took on greater risk and if they were to make money in the process, they deserve it.

Capitaland:

CapitaMalls Asia:

If prices were to move higher next week to test resistance provided by the longer term MAs, I would move to cut my long positions in these two counters, bearing in mind that their downtrends are very much intact.

I cut losses if prices rebound to test resistance and not when they are moving lower.

Related post:
The long awaited technical rebound.