Thus far, Green Ocean’s price trend has been unfolding
according to our expectations. Firstly, the previous rally reached our RM0.30
price target, following the end of the consolidation phase for the 8 Feb 2012
rally. And then, its share price also tumbled as expected, reaching as low as
RM0.185, just a shy away from our RM0.17 price target. It now looks like its share
price has reached a temporary bottom after a strong rebound occurred on 6 April
2012 and
violating the downtrend line in the process. The stock is now
consolidating the gains and traders could consider accumulating shares during
the consolidation phase and bet on a potential breakout.
Green Ocean’s higher volume caught our attention yesterday.
The stock’s price trend has unfolded in
line with our expectations thus far. Previously, we advised traders to
accumulate its shares while the stock was consolidating the gains of 8 Feb
2012. We also recommended that traders liquidate their positions should the
uptrend line be violated.
So, its share price did retrace sharply, reaching as low as
RM0.185, after the uptrend line was taken out. Nevertheless, the strong rebound
that occurred on 6 April 2012 has violated the downtrend line and the breakout
likely signals a temporary bottom. The “Long White Day” created on the breakout
day is also another strong indication of a temporary bottom. Since then, the
stock has been consolidating the strong gains between the RM0.21 level and
RM0.275 level. Traders could consider accumulating the shares during the
consolidation phase and bet on a
breakout. We are eyeing the RM0.30 psychological
level as the initial upside target, followed by the RM0.35 level. Traders
should cut loss should its share price dip below the RM0.21 support floor of
the consolidation phase.
Note that this trade, which requires a breakout from the
consolidation phase, may take a longer time to be triggered. It is also
possible for the stock to dip below our cut-loss level. At this juncture, bulls
only have a slight advantage over the bears in light of the breakout from the
downtrend line and the creation of the “Long White Day”.
Source: OSK188
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