Healthway Medical: Dwindling volume.

Healthway Medical closed at 16.5c after touching a low of 16c on the back of reduced volume.   Without any significant expansion in trading volume, any upward movement in price is likely to be unsustainable.  In fact, the chances of a downward drift in price is a more likely scenario when volume dries up.

The interest in Healthway Medical's rights also hit a low note today as the price touched an intra day low of 7.5c.  This is a far cry from the first day of trading when it traded as high as 9.5c!  This also means that the purchasers of these rights would be able to own more Healthway Medical's shares at only 15c after paying another 7.5c by 9 Feb 2010, the deadline for the acceptance and payment of the rights.  Why buy the mother share at 16.5c then?

Personally, I see 15c as an important XR support level, followed by 14c.  For anyone who is interested in owning more Healthway Medical's shares at this point in time, buying the rights at 7.5c seems like a better idea than buying the mother share.

DMG and Partners, who initiated coverage of Healthway Medical earlier this month and issued a buy call with a target of 28c has issued a new lower target of 21c yesterday.  They cited the enlarged capital base due to the new shares from the rights issue as well as a share placement exercise as the reasons for lowering the target price.  It may be coincidental but this gels with my XR eventual target price of 21.5c compared with my CR eventual target price of 24c earlier.

Golden Agriculture: Oversold.

Golden Agriculture closed above the 50dMA at 52c, almost forming a dragonfly doji, which is usually a bullish sign.  The MFI declined and dipped into oversold territory today.  We have the conditions for a possible reversal.  Any downside should be restricted by the 100dMA at 48c while initial upside resistance is provided by the 20dMA at 56c.  With all the longer term MAs still rising, although gently, the downside risk for Golden Agriculture seems limited for now.

With recent upgrades of the prospects of crude palm oil (CPO) by RBS Asia Securities and BNP Paribas for 2010, with the former going so far as to say that Golden Agriculture has a fair value of 71c, a floor for the counter at 50c is not unreasonable.

A quick peek at the weekly chart shows an imminent golden cross between the rising 20wMA and the descending 100wMA.  Spotting a probable reversal is always exciting and Golden Agriculture is making my heart beat a little faster.