On 15 Feb 2012, we advised traders to accumulate Green
Ocean’s shares when the stock was in consolidation mode and since then, its share price has reached our RM0.245 and RM0.30 upside
targets. Nevertheless, there is now a strong possibility that Green Ocean will
violate the steep short-term uptrend line after creating a classic “Shooting
Star” which was accompanied by abnormally high volume on 22 Feb 2012. Hence, traders should sell Green Ocean’s
shares if the price closes below yesterday’s low of RM0.29 as the steep uptrend
line should be violated by then. We are eyeing the RM0.225-RM0.25 area as the
initial downside target, followed by the RM0.17 level.
On 22 Feb 2012, Green Ocean created a classic “Shooting
Star” which was accompanied by abnormally high volume. Since the bearish
reversal pattern was created after its
share price shot up from RM0.07 to RM0.38 in just 5 weeks and the candlestick
pattern was accompanied by very high volume, we believe the reliability of this
“Shooting Star” is rather high.
The shift in trend will be confirmed should the steep
uptrend line, as highlighted in the above daily chart, be violated. Hence,
traders may want to prepare for a potential breakdown ahead. We advise traders
to sell Green Ocean’s shares if the RM0.29 level is taken out as the steep
downtrend line should be violated by then. We are eyeing the “Downside Gap”
range of RM0.225–RM0.25 as the downside target. This range also provides
immediate strong support for the stock. Should this area be taken out, look for
the share price to potentially retrace to the RM0.17 support level.
If the steep uptrend line is not violated (which we think is
highly unlikely), this simply means that the current steep uptrend will extend
higher. If this happens, look for an immediate resistance at the RM0.345 level,
followed by the RM0.38 level.
Source: OSK188
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