Genting SP: How low could it go?

I was going through my blog's statistics and found a jump in readership for a post on Genting SP I did in early January.  Of course, that post is outdated by now since it was a TA on the counter.  I looked at Genting SP and discovered the reason for the renewed interest.  The counter is crashing through all supports, including the longer term 200dMA at 97.5c! Intrigued, I decided to take a look at how low this counter might go.

From the plunging OBV, it is quite obvious that distribution is taking place big time.  The counter closed at 95c today, down 7c, on much higher volume.  The MACD showed a sell signal yesterday and this signal was confirmed today.  The MFI is still hovering at the 40% level and is far from being oversold.  All these suggest that there is more downside for this counter and shortists are having a field day here.

38.2% Fibo line at 91c might provide some near term support.  If this breaks, the 23.6% Fibo line is at 81c and the rising 100wMA is at 73.5c.  I rather doubt that price action would descend to the 100wMA in a hurry but one never knows.

I have mentioned before that I do not like the fundamentals of Genting SP and consequently, I was never vested.  However, technically, it is now looking interesting.  I would keep an eye on the MFI and if it enters the oversold territory, it might provide an opportunity to go long.

STI, AusGroup, Golden Agriculture and Healthway Medical

STI closed at 2,769.19, down 24.87 points.  It is still within the uptrend channel and above its 100dMA.  Volume is somewhat reduced and the downwards adjustment in the index is nothing alarming at this stage.

AusGroup looks interesting as volume continues to expand for a second day with price moving up to close at 58c today.  MFI is rising strongly and is almost at 50%.  MACD turned up and a bullish crossover with the signal line seems inevitable.  Currently, the declining 20dMA is providing resistance at 59.5c.  If the price action overcomes this, it could move to 64c which is the resistance provided by the 50% Fibo line.  This is also the price level which the descending 50dMA seems on track to meet in the next few sessions.

Golden Agriculture experienced a down day closing at 55c on the back of reduced volume.  MACD is poised to cross above zero which would herald the return of positive momentum.  Gap support at 54c.  My target price for this counter remains unchanged at 59c if the upmove should continue in the near term.

Healthway Medical's price action formed a gravestone doji today.  This is a bearish candlestick. With the MFI and MACD turned up, the expectation is for some continuing push upwards but these momentum oscillators are lagging indicators.  So, we have to take this with a pinch of salt.  If price action does not close above the resistance provided by the descending 20dMA at 15.5c, we want to at least see the rising 50dMA confirmed as a support at 14.5c.  All we can do is to wait and see.

A rebound or something more lasting?

A reader, CT, posed some questions in response to my post yesterday:

"i was wondering why u would reduce ur exposure at this point in Goldenagri and STI. do u think that there will be another correction soon? or are u just afraid of high volatility? could u expand ur thoughts on that? i ask because it seems to me that after this correction, the entire mkt seems poised for a steady uptick."

The STI broke the uptrend channel's support on 5 Feb before re-joining the channel on 9 Feb.  Of note is that the support broke on very high volume while rejoining the channel took place on relatively lower volume.  This is more bearish than bullish.  Incidentally, the support broke on the same day that the declining 20dMA formed a dead cross with the 50dMA.  The declining 20dMA seems poised to form another dead cross, this time with the 100dMA.  The 50dMA has stopped rising and is drifting lower.  The 200dMA is still rising strongly and should provide a stronger support at about 2600 points.  All these do not mean that the STI is going to crash to the 200dMA but it does indicate more weakness.

In the near term, the MFI is rising and this indicates positive buying momentum.  The MACD has risen above the signal line which is a positive as well.  There is probably some room to move up as the MFI is far from being overbought.  However, keep an eye on volume as without any meaningful expansion in trading volume, the upmove in the STI is likely to be no more than a technical rebound.

Yesterday, while chatting with LP in his blog, Bully the Bear, he mentioned that he is vested in SGX.  I took a quick look at the chart as I was curious and saw SGX clearly in a downtrending channel.  In such a situation, the probability of a counter forming lower highs and lower lows is higher.  It would be prudent to reduce exposure if the price moves to retest the channel resistance.  I mention this as a quick reminder becaue if the charts of counters you are vested in show a similar trending, you might want take this into consideration.

As for Golden Agriculture, I am just doing what I have always done.  As price moves up, I divest gradually at every resistance level.  I hedge against the risk of any sudden reversal in such an instance but I will also never maximise my returns.  Given that the market usually lapses into a stupor after the Chinese New Year period, I am not optimistic that the recent high of 65.5c could be bested.  If you look at the chart, 62c was a resistance level in August 2008 which sealed the fate of this counter as the price plunged after that.  That it was punctured for a couple of days last month in January was a positive but it happened too soon.  59c is a many times tested resistance in recent memory and is psychologically more important.  Hence, I have chosen it as a more realistic target price this time round.  The important thing is to make money.  Greed is not a bad thing but beyond a point, it is.

TA cannot predict what will happen for sure in future.  It simply gives us clues and we can choose to be conservative and wait for confirmation before acting or hedge to reduce risk (which could also reduce rewards).  I have a preference for hedging as I am not a pure TA practitioner.

A very quick look

Very, very tired from a long journey back to Singapore.  Need to sleep.  Yawn.  I have just replied to four comments from readers and I could barely keep my eyes open now.  So, this is going to be a very quick look.

STI is up 35 points on respectable volume.  I expect the index to continue gaining for a bit more.  This is probably a good chance for stale bulls to reduce exposure.  I wouldn't be adding to my positions except for those in counters which remain promising (read limited downside and good upside potential).

Golden Agriculture is pushing higher as expected.  I have divested some as a hedge, gaining 10% in the process.  If you followed my posts on this counter, you would remember that I have a target price of 59c for the upmove this time round.  This remains unchanged.  MFI has just risen above 50% and is a long way from being overbought.

Healthway Medical confirmed the buy signal we saw on the MACD in the last trading session of the Year of the Ox.  You might remember we talked about this in my last post on Healthway Medical as well.  Immediate resistance is at 15.5c, the 20dMA.  Continuing upmove in price could see the XR high of 18.5c tested once more.  Volume needs to expand more meaningfully for any upmove to have a more lasting impact.

Saizen REIT has no movement and I hope to collect more at 15.5c thereabouts.  This REIT, I believe, is a sleeping giant.

OK, would like to blog more but need sleep....  zzzz...