Good evening everyone,
Today the world's second largest transport company and Asia's largest, Comfort Delgro, price movement caught my eye.
Macro view of the chart without the clutter of the indicators, shows prices are up looking like its trying to overcome resistance at $1.57 with prices closing at its 14 day moving average at $1.54 acting as support. The last time it encountered this resistance on the 17th of Nov, the bears won, dropping prices drastically to $1.45. However, we see that the bulls have been driving the price back up. However take note the divergence between volume and price movement. Danger sign no. 1. This was the same issue with Ascott REIT which I pointed out in my previous posts - Ascott REIT Making A Weak Leap and Ascott's Bounce Unsuccessful - which was proven correct. Does it always work this way? No. But it's a reason to be cautious.
Turning our attention to the indicators of the chart, we see Parabolic indicating buying momentum which is true since price has been ascending. Also, 50dma looks like it intends to form a golden cross with the 200dma, which is a good thing but it doesn't look like it's going to cross by the end of this week. Stochastics however, seemed to have turned up looking like it'll cross and give a buy signal tomorrow. It has also been forming higher lows, a good sign. That's good news folks.
Next, the bad news. RSI, MACD, OBV and MFI all look to be heading down. Furthermore, despite the positive cut from Stochastics, MACD is cutting negatively. The bars are also inverting into negative territory. MFI looks to be forming lower lows, which is also a divergence from the price uptrend. Another danger sign. Lastly ADX shows selling indicator climbing a possible sign that selling is strengthening. The bright side to this is that the trend is weak so far.
My take: From the looks of it, my opinion is that prices may drop in the near term possibly to its next support at $1.52 - $1.51. However, as the market sentiment seems to be getting more bullish, my guess is that it would only be a matter of time before they push through the $1.57 resistance. However, though unlikely, a break below this could send prices to $1.49 and then to $1.45 if the bulls don't show up by then. Personally with a yield of only 3.4%, I wouldn't think of investing into this for income just yet. I like the company but I'm patiently waiting for another crash before being vested. I'm in no hurry. The waiting game allows me to build up my cash till then.
Not vested (like you didn't figure that out by now haha)
Cheers,
~K
No comments:
Post a Comment