Healthway Medical: A beautiful symmetry again.

On 11 January, I had a post titled "Healthway Medical: A beautiful symmetry."  In that post, I said: "I am a believer in chart patterns. See how the cup formation troughed at 9.5c and topped out at 14.5c? The target price in case of a breakout of the top of the formation is just a projection of the trough to the top and beyond which gives us 19.5c. This target price was reached in just one week from the midpoint of the cup pattern at 12c."

Now, I observe a similar symmetry in Healthway Medical's chart once more.  Recent bottom was formed on 11 Feb at 13.5c before price moved up, formed mini ascending triangles before breaking out on 3 Mar.  The neckline?  16c.  Target price of the mini ascending triangles would be a projection of the bottom at 13.5c to the neckline at 16c and beyond which gives us 18.5c which was hit on 9 Mar.  OK, interesting geometry lesson.  Now what?

This suggests that 16c is an important support and resistance.  The merged 20d and 50d MAs which are rising in tandem would be at 16c soon and re-inforce the importance of this price level in the near term.

Price has not been able to form a new high since 9 Mar. Dwindling volume suggests a lack of buying interest.  This is confirmed by the lower high formed on the MFI signifying a reduction in buying momentum.  A sell signal was registered on the MACD yesterday and confirmed today.  So, is the price going to crash?

Looking at the MFI sometimes provides an incomplete picture without the OBV.  If we look at the OBV, we will see that there is no strong distribution going on.  So, although the MFI suggests a slowing down in buying momentum, the OBV reassures by suggesting that the counter is not undergoing any distribution.  The logical conclusion is that weak holders are once again being shaken out.  However, this does not mean that price will not drift lower.  We might see 16c tested yet.  That coincides with the fundamental fair value I have ascribed to the shares of Healthway Medical when I did a revaluation on 24 Feb: "Healthway Medical: An updated valuation."

If 16c fails to hold, we could possibly see 13.5c tested and would relegate Healthway Medical to a wide trading band although the rising MAs at the moment suggest that the uptrend is still intact.

Related post:
Healthway Medical: A beautiful symmetry.
Healthway Medical: An updated valuation.

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Golden Agriculture: Partial divestment at 59c.

If you have been following my posts on Golden Agriculture in recent days, you would get an impression of how TA works for me.  TA can never show us what will happen.  It can only show what might happen and there will always be two possibilities in price movement, up or down, with varying probabilities.  What we can see quite clearly would be things like supports, resistance and trend, amongst a few other things.  TA informs on fair exit prices in the event that price goes up and in the event the price goes down, what are safer entry prices.  If the uptrend is intact, buy at supports and wait to sell at resistance; if the price does not move up but moves back down to support, consider increasing exposure.

Using Golden Agriculture as a case study, let us do a recap:

In my post of 5 March, I mentioned that Golden Agriculture's price action formed a white hammer, closing at 54.5c, suggesting that a trend reversal is at hand.  Initial resistance at 57c, followed by 59c.  On 8 Mar, I mentioned that the white spinning top formed was unlikely to be a trend reversal signal because it did not take place after several consecutive days of upmove in price.  On 9 Mar, yesterday, a doji was formed, another possible trend reversal signal and it was accompanied by a decline in the MFI.  I suggested that if the malaise continued today, the counter might do a gap cover to 54.5c where it will have initial support and I would accumulate on weakness as the uptrend is intact with the rising 100dMA at 50.5c.

So, the strategy?  Divest at resistance of 57c and 59c in case of an upmove.  Accumulate on weakness in case of a move down to 54.5c and 50.5c as the uptrend is intact.  Whichever direction the price moves, we have a plan. My overnight sell queue was done and I have partially divested at 59c this morning, retaining a smallish position in case the price continues to move up.  This is a hedge, which is another one of my strategies.

For anyone who has been following my trading strategy so far, I hope you have made some good money.  Remember, it is never wrong to take profit.

Related post:
Rationale for partial divestment.

Golden Agriculture and Healthway Medical closed unchanged.

Golden Agriculture closed unchanged today on lower volume at 56c, forming a doji in the process. MFI has dipped below 50% which indicates a breakdown in positive buying momentum. If the malaise continues tomorrow, we might see the counter do a gap cover to 54.5c. This is very close to the rising 50dMA while the rising 20dMA is at 54c. If these supports break, strong support is provided by the rising 100dMA at 50.5c. Overall, the uptrend is intact and I would buy more on weakness.

Healthway Medical's EGM took place today to seek shareholders' approval on plans to expand in China. Shareholders' approval are also sought for the share placements to IFC and five substantial shareholders. Some were expecting this to give the counter a bit of a boost but that did not materialise today as the price hit 18.5c, the previous XR high before retreating to 17.5c, forming a graveston doji. Indeed, the bullish picture from yesterday did not follow through as the volume today was significantly reduced, suggesting a lack of strong buy ups.


As I mentioned in an earlier post, I've sold a third of my remaining investment in Healthway Medical at 17.5c and will sell more at 18.5c. Technically, if the counter does a pull back to 15.5c, which is where we find the rising 20d and 50d MAs, that might be a good entry price as the trend is still up.


This counter has run up from a recent low of 13.5c on 11 Feb to the high of 18.5c today. MFI shows how it went from being oversold to overbought in the same period. We should not be disappointed if it decides to take a break.