CapitaMalls Asia: Black hammer day.

Feeling somewhat under the weather, I think the very cold and dry weather here is getting to me. No drinking session for me. I came back to the hotel, took a warm shower, drank herbal tea I bought from a convenience store and I am feeling so sleepy now. Looking forward to going back to tropical Singapore early tomorrow.

In a quick post last evening, I mentioned that CapitaMalls Asia's share price "closed below the trendline support today at $1.89. I would not advise buying more at this price since the uptrend is compromised. I have turned cautious."

If I were not informed by TA, I could have bought more as price plunged today. Look at the high volume. I believe that the price weakness has brought out some shortists.

I received emails and comments regarding this counter. It is interesting that the counter is generating so much interest. To me, it is clear that many market participants are keeping an eye on the counter and waiting for clearer signs to go long here. Fundamentally, it is a strong company and technical weakness would offer opportunities for investors.

So, what am I doing here? Like I said, I have turned cautious and I am not adding to my position. I am waiting to see if the low of $1.83 would hold up as support. If it does hold up as support, I could add to my position. If $1.83 breaks, I would wait to see where is the next low.

Is there a chance of a reversal in the next session? A black hammer formed today as price gapped down at $1.88, touched a low of $1.85 before closing at $1.87. The bears won the day but the candlestick suggests some fierce fighting back by the bulls. So, although the black candle was formed on the back of much higher volume, there is some support.

Even if we know that a company has good fundamentals, waiting for the technicals to give clearer signs before going long is the way to go.

Related post:
CapitaMalls Asia: Closed at $1.89.

CapitaMalls Asia: Closed at $1.89.

Price closed below the trendline support today at $1.89. I would not advise buying more at this price since the uptrend is compromised. I have turned cautious. However, notice that the trading volume is, once again, very thin on a black candle day. It looks to me to be a continuation of a low volume pull back pattern.

Does low volume mean that price could not weaken further? Definitely not but if we look at the OBV, it is obvious that there isn't any distribution activity. In fact, if you ask me, the OBV has gone up slightly in the last 4 sessions which suggests mild accumulation. This is consistent with what I said in my last blog post that there are bargain hunters out there who are waiting to buy at lower prices.

So, what am I looking out for now? The previous low was at $1.87. This was formed earlier this month. Will price form a higher low at $1.89 and recapture the uptrend later on? Of course, we might have to draw a gentler trendline support too. Or will the price go down further to test $1.83? No one has the answer but with the very low volumes as price pulled back, I do not think there would be any drastic sell downs in the near future. I would wait for the situation to become clearer before making my next move.

Related post:
CapitaMalls Asia: Doji at $1.91.