Oceanus

A counter which has been hotly discussed is Oceanus. Personally, I am not vested in this counter but the word "Oceanus" came up a few times when I went through the list of words put into the "search" function in my blog. So, this is a TA of Oceanus for anyone who might be interested.

On 30 Dec 2009, after forming a black spinning top with extremely long legs, usually a strong sign of a possible reversal, Oceanus' price has been sliding down in the last few sessions. The reversal sign was confirmed on 31 Dec 2009 by a sell signal on the MACD. Breaking the 61.8% Fibo line at 41c yesterday and closing below the line today suggest that more downside may follow. Next support level is provided by the 50% Fibo line at 39c which coincides with the rising 20dMA. Rising 50dMA and 100dMA limit further downside at 36c. The short term uptrend is drawn using the color army green and from this, we see that the uptrend is still intact.

However, with the MACD poised to do a bearish crossover, more downside is probable. The risk premium is not as high as it was in the last two trading days of 2009 but waiting for a pullback to stronger support levels might be prudent before accumulating.

Healthway Medical needs a break?

A friend sms me this morning and asked me for a new eventual target price for Healthway Medical as it was last done at 19.5c. I was driving at that point in time and I was amazed at how quickly the counter moved to hit the target price I identified. In slightly more than half an hour from the opening bell, Healthway advanced 2c from 17.5c to 19.5c. However, the eventual target price of 19.5c is based on chart pattern and proved too strong to be taken out so quickly and price closed at 18.5c today.

Most of the time, chart patterns are accurate windows into probable future price movements, resistance and support levels. Our FA says that Healthway is worth a lot more than 19.5c but TA, as a measure of the mass psychology of market participants, tells us where the probable stops are in the meantime.

Healthway Medical has a white candle with a wick on top that is as long as the candle's body. In spite of increased volume today, price closed only 1c higher. OBV still shows accumulation. There is no sell signal on the MACD but this is usually lagging. MFI is levelling off which shows a slow down in buying momentum and remember, it is still in the overbought region. Is a correction due?

Taking a peek at the weekly chart, the MFI has moved sharply into the overbought region. The last time it did this was in April 2009. Technically, there is more downside risk now. I would accumulate after the counter has done either a correction in price or a correction using time. Incidentally, I have divested more of my position in Healthway Medical today.