Friday, March 27, 2009

Sell Wilmar, Golden Agri, Indofood Agri

Wilmar International (WIL SP; S$3.26) – SELL

• The stock is still holding on to its short-term uptrend channel after hitting a temporary bottom at S$1.76. However, the may be little upside for now, as there is a cluster of resistances at S$3.38-S$3.46. Next upside target is at S$3.68 and S$3.88.

• It is poised for further correction as the indicators are showing signs of exhaustion. MACD is losing momentum while RSI has also hooked down.

• Despite our immediate negative view on the stock, it is unlikely that the pullback may derail its longer term uptrend. Support is at S$3.12 and S$3.02 (also its 30-day SMA). Take profit now.

Golden Agri-Resources (GGR SP; S$0.295) – SELL

• The stock is still holding above its 30-day SMA but it appears that momentum is easing after it fails to hold above S$0.305. Consolidation may take place after recent rally as sellers at S$0.305 and S$0.33 would cap gains.

• MACD is still positive but RSI indicator has hooked down. Mixed technical readings usually point to volatility.

• Daily chart still looks conducive but could succumb to short-term weakness. Initial support is seen at S$0.28 followed by S$0.26. Time to take some profits, possibly near its resistances. However, there could be buying opportunities near its supports.

Indofood Agri Resources (IFAR SP; S$0.625) – SELL

• The stock looks toppish after it failed to overcome recent high at S$0.655. The formation of a black candle coupled with the easing technical landscape suggests that there are downside risks to the stock.

• MACD is weakening while RSI also hooks down. Initial support is seen at S$0.59 followed by S$0.57. A fall below its 30-day SMA at S$0.55 would paint a very bearish outlook on the stock.

• It needs to cut above the S$0.67 resistance to conclude its sideways pattern but chances are remote at this juncture. Sell into strength.

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