Sunday, December 11, 2005

SPH (T39) as requested


Bad News:
MACD envelopes slopped down and –ve crossed. This is bearish! The bigger the amplitude of histogram cycles, the larger the price cycles. This means it takes time for prices to rise due its having have to complete the declining turns.
Good News:
Acc/Distrn and OBV chart is starting to curve up and the RSI has halted its descent and has turned up from below 36. An upturn is bullish and from below 30 is very bullish! In resonance, Stochastics are suggesting good upside as it approaches the oversold region.
Candlesticks:
Let’s us have a peek at the Candlestick Pattern. Ah…! A Spinning Top has occurred. It represents a tug-of-war between the bulls and the bears. Because there is no gap between the preceding black candlestick, hope of an imminent reversal may not be a “sure case” as the one that has got one. Nevertheless, and kindly bear with me a bit longer and let me take the liberty to explain the psychology of a spin top to my almost confidence-deficit readers.
Like a Doji, spin top suggests a balance of demand and supply. Normally the bull/bear war has to end with the beginning of a new trend (meaning reversal). At least is a pause in market activity!
Notice, the drop of volume – this is expected as buyers refused to pay for the price that the sellers asked. Hence, activity reduced.
In a scenario like this, my sense is eventually the selling pressure will be turned to buying pressure. Why ???  Because the buyers got impatience, just buy it! Encouraged, other buyers join the “herd mentality” buying spree, thinking it is cheap to buy now and also not wanting to miss the wagon of fortune.
Verdict Time
I’m reticent to supply one. But if I’ve to, this is just 1 opinion!
If not already in the trade, wait and watch for confirmation of reversal, just 1 more white candle, the dominant one, i.e. one with relatively higher volume to enter and thus harvest the Xmas ride. Vested one should hold, of course very tricky for those with Warrant’s due date, you got to make your own decision.

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