While we have forecasted the bearish trend of Golden Agri-Resources (GGR SP) correctly, the magnitude of its decline was more than what we had expected as it broke below our previous support at 0.285 to hit a low of 0.275 during last week. Nevertheless, we believe that further downside may be limited and we advocate accumulating long positions at our forecasted support levels.
The 14-day ADX is still declining, implying that the current (bearish) trend remains weak. Furthermore, while the MACD chart had recently seen a bearish moving average crossover, it nonetheless still trades in positive territory and above the zero line. Finally, although share price had experienced a decline last week, the bollinger bands had not followed on with an expansion, indicating the lack of selling momentum.
Support is identified at the 0.27 – 0.275 region, courtesy of a series of daily lows, the lower bollinger band and the 50- day moving average. On the other hand, resistance is present at the 0.315 – 0.32 area as implied by the technical gap and a series of daily highs. It has a TRADING BUY recommendation with a target price of S$0.60.
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