On the 24th of Dec, I took a look at ComforDelgro's chart. Refer to Comfort Delgro's Climb to Resistance Looking a Tad Weak. This was what I said I feel would happen, "my opinion is that prices may drop in the near term to its next support at $1.52 - $1.51." On hindsight now, this didn't happen. The 14 day moving average played a stronger support that I expected. I did also state that the ADX showed the selling trend was weak. This was probably a good clue that prices would hold up at the 14dma. A lesson on my part. That said, it did take one more dip back to the 14dma support despite crossing through the noted resistance at $1.57 showing that the initial challenge was indeed "a tad weak" and therefore heading for a mini-pullback.
I also stated that "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." Here's how that played out so far.
On the 06th of Jan, the resistance was finally taken out after hovering around the resistance for another week. If you notice, the 14dma has been providing strong support through the whole affair. Like any other breakout, this cause share price to spike leading it now to challenge its next resistance at $1.63. 14dma though, has yet to catch up. Some bulls are mighty optimistic. In the longer term, I'm convinced that they've every reason to be as the market sentiment is still bullish but in the short term, lets take a look at the indicators to gather the information.
Stochastics for one, is in the overbought region. Also, it has given a sell signal. RSI and MFI looks to be heading into overbought region as well. MACD however is still trending upwards, along with OBV. ADX indicates that buy momentum is rising but the trend strength is currently weak.
My take: As the 14dma has been providing strong support thus far, I expect this to continue. However as momentum is still positive, it is likely that instead of prices dropping back to its 14dma at $1.57, prices will continue hovering for the next couple of days while awaiting the 14dma to catch up with it. My estimate is for prices to bounce between $1.59 - $1.63. I do not expect the $1.63 resistance to be taken out just yet. With a P/E of 15 and yield of 3.25%, anyone buying into this for dividend yield may find SBS Transit a more enticing buy at the moment with a lower P/E and a better yield.
Not vested in either,
~K
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