Share price of Golden Agri-Resources (GGR SP) has seen its bollinger bands starting to widen which implies that more volatility is on the cards. Taken with the bullish moving average crossover within the MACD chart and with the 14-day RSI yet to hit the 70 mark, we believe that price action may be poised for further gains. We also do not view the upper bollinger band being violated by share price (which under certain circumstances may mean that the underlying security is overbought) as a major concern, as the bands are just in the initial stages of expansion.
Resistance is seen at the 0.335 mark, courtesy of the daily high on 07 Jan 09 and the 61.8% fibo retracement move from 22 Sep 08 to 28 Oct 08. In the event that price action turns bearish, however, support at the 0.285 – 0.29 region as identified by a series of moving averages and trading lows should serve to cap any additional downside.
For our fundamental outlook on Golden Agri-Resources, we have a TRADING BUY recommendation with a target price of S$0.60.
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