technical analysis
time again for another round of analysis. this would serve as a continuation of last week's analysis. let's first look at SGX's performance.
the stock closed in on friday at 6.68, just as i thought it would. the week saw a downtrending trading session, from 6.92 down to 6.68. currently the market may show a sign of a temporary recovery as H1 earnings are going to be reported (even though the earnings may be below expectations, an slightly higher than what was negatively expected could trigger a hiccup).
as we can see from this stock, share prices have been on a steady decline without any stoppages for consolidation or a correction, hence, most people would expect a slight correction coming up soon. however, in my opinion, since the market is still relatively quite, the steady downtrend is just an indication of how weak and 'lifeless' the market is and as far as anticipating a correction, i'm not too sure.
currently stochastics are still hovering in the oversold regions, where the last 2 trading days pushed the stochastics above the signal line with a green trading session. now with this, i would refer to RSI readings, but at the moment, the momentum of the stock is still weak, and i would need a convincing move above the 30% or 50% mark spark a long signal. as far as the MACD goes, i can't really get a clear indication from the readings as of late. however, if upcoming trading sessions shows a positive divergence, then i better keep my eyes peeled for an upturn.
my verdict: next week looks rather uncertain. i'm not sure whether there would be an upwards correction of the prices, but from the looks of it, prices may continue to fall. here are 2 scenarios. first, if share prices presents a lower open, and ends the day in the red, then just be prepared for a steady downtrend. second, if prices open higher and ends the day in the green, then keep eyes peeled for a correction. however, in my opinion, if prices continue to fall, it may fall down to the 6.50 level, where it should nestle and find strong support.
Capitaland shocked me with a rebound over the last 3 days of the week, closing on friday at 5.79 from a low of 5.57 on tuesday. i guess my verdict on the stock fell short on wednesday when the share prices shot upwards. i believe that it was a much needed correction before prices can continue downwards.
as it stands, stochastics shot way above the signal line and has cut above the 50% mark, a potentially good long signal. however, i would wait for my RSI reading to cross above the 50% mark before going long (currently just hovering below the halfway mark). the positive divergence on the low closing of 27th june and 1st july may have sparked the 3 day uptrend during the week. however, looking at the current readings, a sustained move above the signal line may indicate further uptrending for days to come.
personally i am still rather bearish about this stock at the moment, but something tells me to shed the bear skin and put the bull horns on. so far i have arrived at a number of conclusions regarding this stock.
my verdict: currently, it is the end of the downtrend (for the moment) and i would advise others to wait till the dust cloud settles and a clear trend presents itself before jumping on the bandwagon. a higher open tomorrow with a close in the green may signal an upward move. if the prices were to move upwards, i'd probably give an estimate of about 0.30 to 0.40 depending on market sentiments. it may move up to its resistance at about 6.20 and may drop back down to 5.70 mark. and when this happen, try and watch out for a reverse HNS. if tomorrow's session presents a lower open and ends off in the red, then be cautious over the next couple of days to establish a clear direction. i believe that the 5.50 level is still open for testing if the momentum carries the stock downwards. as of now, i won't be surprised if the prices were to move up for the next couple of days.
that's all folks, has been a busy week so far. enjoy and have a good trading week.
