Golden Agriculture: FA and TA.

I retain a very small long position in Golden Agriculture. The price of crude palm oil (CPO) has made a new low for 2011, closing at RM3,040.

"Inventories are likely to accumulate in the coming months, unless prices fall to around MYR2,700-MYR2,800/ton, levels that might spur strong physical demand for the commodity and prompt traders to buy on dips, said a trading executive in Kuala Lumpur...

"June output is expected to rise 7%-10%, from 1.74 million tons the previous month, and end-June stocks could rise by as much as 24% to 2.38 million tons." Dow Jones Newswires, July 05, 2011 07:17 ET (11:17 GMT).

The longer term fundamentals, given the strong and growing demand for the vegetable oil, are still intact. However, short term weakness could present rather strong downward pressure on prices. Therefore, I am exercising caution and not adding to my long position in Golden Agriculture. This decision is also informed by technical analysis.

If we look at Golden Agriculture's daily chart, the symmetrical triangle is quite obvious. Two thirds to its apex, we could see a movement breaking the triangle in the near future. Up or down? With price finding it hard to recapture support provided by the 200dMA, the bias is towards the downside. With the ADX indicating a lack of trend, look to the Stochastics for clues. It is turning down from the border of the overbought region. Some softness in the counter's share price would not be surprising.

A look at the weekly chart shows that the Stochastics has broken support. A weakened momentum is obvious. If price were to break the symmetrical triangle to the downside, we could see a test of support provided by the 100wMA. 61c? Could happen.

Long holders could be walking on thin ice here. Good luck.


Related post:
Golden Agriculture: Strong resistance.

Capitaland: Weekly chart.

Capitaland seems to be enjoying a respite.

A quick look at the weekly chart suggests that a retest of the declining 20wMA as resistance is likely. It could happen this week or the next couple of weeks.

If I were to hazard a guess, it could be at $3.14 if it should happen as that is also where we see some resistance provided by the candlesticks. However, volume declined in the last couple of weeks. So, this brings into question whether recent strength is sustainable.

Wait and see.

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Silver: Price formed another lower high.

Staying cautious on silver has been the right thing to do. The declining 50dMA seems on track to forming a dead cross with the 100dMA in the near future with silver's price forming another lower high this week, closing the week at US$ 33.70 an ounce.

All eyes are on the 200dMA and whether silver's price could stay above this long term moving average. If the support holds up, we could see bulls coming back with a vengeance. If the support breaks, the bears could have a field day. The 200dMA is currently at US$ 31.71 an ounce.

A quick look at the weekly chart shows that the uptrend is still intact although the momentum has clearly weakened. RSI has gone under 50% which was acting as support. A lower low on the MACD is a forgone conclusion although it is currently still in positive territory.

I am maintaining the status quo. This is a time of waiting and could be a most unbearable period. A time to add to long positions would come and that is probably when the supports provided by the longer term MAs hold up. Till then, I just have to sit tight.

Related post:
Silver: Trying to find a base.