BreadTalk Update

As expected, BreadTalk has broke through its resistance at $0.65 and out of its ascending triangle formation albeit sooner than anticipated (refer to BreadTalk Challenging Resistance and the chart below). 

This breakout has driven prices up. Prices are currently challenging the next resistance at $0.70 (refer to the chart below). When prices reached $0.70 previously, the 5-for-1 bonus shares issue caused prices to drop to $0.49 - an over-reaction by the market. Anyone who was braved enough then would have made a handsome profit by now. Also, anyone who entered at the 14 day moving average like I pointed out as a good entry point, would be sitting on some delightful paper profits now as well. Nonetheless, is there still room for the stock price to move up?

Well once again, we can see another ascending triangle formation. Any breakout would result most probably in another spurt. As mentioned in my last post on BreadTalk, volume is still very low. Previously I debated this low volume as either a weak push up or perhaps a lack of sellers as they hold the belief that the stock is more valuable than current prices.  With the price breaking out of its formation and resistance, and with prices still continuing to slowly creep upwards, this is leading me to believe the latter. With this reasoning, I believe it is still possible for prices to climb further. From the chart below, we can see that prices have hovered at resistance for the last four days. However, will it continue to move higher just yet?

Turning to the indicators for a clue, RSI shows BreadTalk stocks are pretty overbought at the moment while MFI and OBV suggests steady accumulation has been ongoing. Stochastics and MACD however, hint that some selling may be starting despite ADX indicating that the trend is currently relatively strong. Furthermore, ADX DI+ has dipped below ADX 14d supporting the view that selling may be occurring behind the scenes. Immediate support lies at $0.675. Next support lies at $0.66. 

My take: Prices looks likely to hover between immediate support and resistance for the next couple of days since profit taking may be taking place while waiting for the 14dma to catch up. The 14dma also provides some support should prices dip below $0.675. That said, I expect prices to break through the $0.70 and head higher thereafter. When this will happen is anyone's guess. My guess is that it will happen by the end of the month. Only time will tell if I'm right. 

Good luck everyone.

Vested,

~K

Breadtalk Challenging Resistance

In my previous post on Breadtalk, Quick Post: Breadtalk Still In Uptrend, I mentioned that prices dipping to the 14 day moving average at $0.62 would be a good entry point for those who missed the $0.60 chance. 

Lets see how that played out.

Prices indeed bounced off $0.62 support and have now risen to challenge its resistance of $0.65 once again. But the biggest question on my mind is, "Will it succeed?"

The weekly chart shows that the uptrend is still intact, with moving averages aligned properly. However, price has moved higher than the 14dma which has been providing strong support. 

Turning to chart patterns:

Here, we continue to see an uptrend but it also seems that a triangle is about to complete its formation. With higher lows and resistance remaining the same, this is the third assault on the resistance.

Volume however has remained low through this which may indicate that the push is weak and that prices may fall back to its 14dma support before a fourth push upwards. That said, with volume remaining so low, it could indicate a lack of not only buyers but also sellers who realize the value of their company and are not letting the shares go without demanding better prices. As such, prices may hover around the $0.65 resistance for a couple of days to allow the 14dma to catch up, completing the triangle formation and breaking out thereafter. Furthermore, a golden cross between the 14dma and 50dma looks to be soon. This may provide the push to break out of the resistance.

Onto indicators:

Despite prices being at the top of the Bollinger Band range, Parabolic S&R indicates buying momentum still present. However, ADX doesn't show any strength in the trend. Furthermore, RSI and Stochastics are in overbought regions which increases the chance of a short term pullback. OBV has been gradually rising which is an indication of accumulation. MFI too has risen higher. It was in oversold regions since mid-Nov. Currently, it is starting to round which may indicate profit taking. Like the OBV and MFI, the MACD is gradually rising as well. However, there is no signal to buy or sell and doesn't look like it'll provide a signal any time soon.

My take: With all the info provided, I personally feel that prices are not going to break through resistance just yet. However, it's looks more and more likely that the resistance will be broken which I expect to happen within the month. The 14dma still provides a good entry point for now to anyone interested. Should the price break resistance, prices are expected to head upwards thereafter.

~K

Quick Post: Breadtalk Still in Uptrend

Quick post:

As readers would know, I've been following Breadtalk and have vested interest in this company. 

In my last post, I mentioned that prices seem to be in an uptrend channel. See Breadtalk Dips But What Next? for further discussion.

The last time I mentioned that a buying opportunity may be presenting itself (see Breadtalk Buying Opportunity Soon), prices dipped to the bottom of the uptrending channel as well at $0.60. Today a look at the chart without all the other indicators shows a doji forming very near the base of the channel again.

A look at the weekly chart shows this uptrend very clearly with the 14 day moving average supporting the climb. 

This could be another buying opportunity for anyone looking to be invested before price head higher.

That's it for now on Breadtalk.

What did I tell ya? Quick post.

Cheers,

~K

Breadtalk Dips But What Next?

My expectations that prices will bounce by this week hasn't materialized but my hopes that prices will dip to its 50 day moving average has come true. (See Breadtalk Buying Opportunity Soon for initial analysis.) Not only has it dipped, yesterday prices broke through the 50dma and continued heading south today. Mixed feelings about this.

From the looks of the chart, there are a couple of positives and negatives. Let me list them.

Positives:

1) Prices seem to be following an uptrend channel.

2) Price closed at support of $0.61.

3) RSI, Stochastics and MFI are in oversold regions

4) ADX reveals that the selling is not a strong trend currently.

5) Volume is low despite the selling.

Negatives:

1) Prices had trouble breaking resistance of $0.645 resulting in the dip.

2) 14dma looks to be heading to form a dead cross with 50dma by the end of the week.

3) OBV is has turned down.

4) 4 consecutive black candle days.

If selling continues, I'm expecting a dead cross to form between the 14dma & 50dma. This has a danger of plunging prices down even further thereby breaking the uptrend channel and compromsing support at $0.61 which could send prices down to the rising 200dma as well as previous resistance at $0.59. As stated, ADX doesn't show any trend forming yet despite the selling continuing as evidenced from the 4 black candle days. This gives hope that there could be a rebound especially since RSI & Stochastics indicate stocks are oversold at the moment. However with OBV turning down, and no upturn from RSI and Stochastics this gives an uncertain picture as to when the rebound might take place, if it takes place.

Shall wait a couple more days for clearer signals before deciding the course of action to take. 

Good luck peeps!

~K

Breadtalk Buying Opportunity Soon?

There are people in the world so hungry, that God cannot appear to them except in the form of bread. ~Mahatma Gandhi

It's quite a correction that has been going on these last couple of days. However, Breadtalk hasn't been affected too much. As it is on my watchlist, I'm thinking of loading up on the stock to add to my meagre holdings.

Resistance is currently at $0.65 while support is at $0.62, which also happens to be the 50day moving average. A quick look at the chart shows that Stochastics and RSI are almost in oversold regions. From the MACD however, it seems that there may be a bit more selling before prices turn up proper. A good thing if you're looking to buy. Bollinger bands show prices are at the bottom of their volatile range.  Consolidation looks to be taking place as a squeeze seems to be forming which could result in a new price movement in the next couple of days. Also MFI is in the oversold region while OBV has been steady implying that quiet accumulation has been taking place while people are selling. A glance at the ADX, reveals that the strength of the trend which started on the 1st of Nov is weakening. This may mean a new trend is about to emerge. However, do note, ADX does not predict the direction of the new trend, it only indicates when a new trend might be occurring. As such, a new downtrend may form instead since it looks like the -DI will cross the +DI.

Volume however, is also low these last couple of days suggesting that not many are selling the stock despite the correction. Even the spike in trading volume on the 10th of Nov, didn't cause much movement in the price. Furthermore, the transactions made today (see table below) shows that selling was only 41,000 shares sold compared to 128,000 shares bought. 

My take: Personally, I think the chances of a new downwards trend is quite low. I'm expecting prices to bounce up by early next week. As the fundamentals for Breadtalk are good, the only thing on my mind is if I should wait for Stochastics to turn upwards and cross the signal line first before buying. Hey, after all what goes low can still go lower.

Perhaps tomorrow I'll buy in. Gotta think on this a bit. Hoping it'll drop to the 50day ma though. Lets see what happens.

~K