Monday, March 28, 2011

NOL: Still in downtrend

NOL's price has been constantly weighed down by high oil prices and closed at 1.93 on high volume of 31.7 m shares today.

First take a look at NOL's long-term chart. The stock was in a steady uptrend since Apr 2009, after which it broke its uptrend on 20 Feb ( see next chart) and failed to close above it. After this trendline was broken, NOL started falling more rapidly. In fact it had already been in a downtrend since 5 Jan when it peaked at 2.40, forming a series of lower highs and lower lows but the broken uptrend further confirms this and makes it more bearish. NOL has also been continuously under its 20 day MA, which is falling with the 50 day MA, confirming the downtrend. This counter looks more like a candidate for going short although even for bearish stocks there are still opportunities for going long. The green line shows the 1.90 level which is quite an important support level.

Important support: 1.89-1.90 (24 Aug 2010 low, 38.2% retracement from 2.40-1.04) , 1.75 (May 25 2010 low)
Important resistance : 1.98, 2.02

MACD and RSI are still trending down which is bearish. The price has also failed to close above the 20 day MA indicating that the trend is still down

NOL is trending downward and the upper downtrend line at 2.01 is also acting as resistance as NOL always experiences profit taking around that level and it also made a large move lower today on high volume. Price is also below the 50 day MA and 200 day MA at 2.12 and 2.08 respectively.

Strategy: Possibly buy around 1.90 which is near several important support levels and near channel bottom. For a downtrending stock, buying at top of channel is a strict no-no. Take partial/full profits at top of channel. Buy on breakout of downtrend channel if accompanied with high volume, preferrably after sustained closes above 20 day MA showing that trend has reversed.

I usually prefer to buy strong uptrending counters on temporary weakness than buy weak counters on breakout as it could be a fake breakout.

STI is finally taking a pause today after 5 straight up days last week. I am pleased to have taken profits on CityDev at 11.72 on Friday.

Thursday, March 24, 2011

Noble Grp : Testing upper downtrend channel

On 24 March, Noble Grp closed at 2.15 with average volume of 31.6 m shares traded.

Resistance levels : 2.16( downtrend resistance, green line) , horizontal resistance (orange line, tested on 18 Feb, 7-9 Mar),
2.25 ( 3 Mar high) , 2.32 (7 Feb high), 2.40 ( 13 Jan high)

Support levels: 2.07, 2.00, 1.94 (15 Mar low)

Indicators: MACD, RSI and Stochastics turning up

The defining features of the chart are the downtrend since 13 Jan that Noble Grp is still in, as well as a potential double bottom that may have formed at 1.94-1.96, on 24 Feb and 15 Mar. The steady rebound from the low of 1.94 further proves that 1.94-1.96 is a strong support region.

Noble also bounced off the 200 day MA of 1.94 on 15 Mar which is a good sign, indicating that sentiments are still bullish,

Noble closed just shy of the resistance at 2.16 which is fairly strong but if it can be broken with healthy volume 2.25 could be seen in due course. If the downtrend channel (green line) is decisively broken, Noble Grp could resume its uptrend movement and possibly test 2.40 in the future.

On another positive note, STI managed to recapture 3040. Hopefully this resistance will become support.