China Hongxing: CD.

China Hongxing went CD today and the market rewarded its share price in a most sporting way as it touched a high of 22.5c before closing at 22c. The 19.5c target identified earlier this month is probably resistance turned support at this point.

Volume expanded significantly as price formed an impressive white candle. The OBV turned sharply upwards suggesting strong accumulation.  With volume so high, there could be a follow through. 22c target was based on the 138.2% Fibo line. We could see the 161.8% Fibo line tested next and this is at 23.5c.

Although the sell signal of the previous session as seen in the MACD histogram was negated today, the MFI and RSI are both in overbought territories. So, although price could push higher, this counter is rather overbought and anyone choosing to go long at the current price would have to be very nimble and might have to settle for smaller gains. The risk premium is definitely higher.

Related post:
China Hongxing: New target.

Courage Marine: Awakening.

On 11 Sep, a reader, Wong, asked if it would be a good idea to accumulate more units at 18c.  I avoided giving a straight answer as usual and replied:

"If you have excess funds lying around and if you think that the shipping industry has turned the corner, 18c seems inexpensive.

"If you already have a large investment in Courage Marine, then, you have to question how comfortable are you to increase exposure to this company.

"In my opinion, Courage Marine is fundamentally sound. If there should be nasty surprises in the macroeconomic environment, Courage Marine would most probably survive because of its strong balance sheet. Shipping is a cyclical business. We have to ride the waves."

Courage Marine's share price has been trapped in a range between 18.5c and 19.5c for a long time and there are some whom I "overheard" in Bully the Bear's cbox being sick of holding on to the shares.  Patience is a rare commodity, after all.

With more people conversant in TA, charts are revealing its secrets to more market participants and there was a huge sell queue at 19.5c today as many recognise it as a strong resistance. However, there was heavy buying up in the first half hour of trading and 3,696 lots were bought up at 19.5c.  Trading volume is also impressive so far with a total of 5,247 lots changing hands.

Is Courage Marine awakening? If the resistance at 19.5c is taken out convincingly, it could very much be the case. Good luck to fellow shareholders.

Related post:
Courage Marine: Range bound.