- After a rally of 84% over the last 1.5 months, CapitaLand may be headingfor a pullback in the coming weeks; this as the recent price action hasformed a dark cloud cover (bearish pattern) just below its strong 1-yeardowntrend resistance line.
- Technical indicators (Force Index, RSI and MACD Histogram) have beendisplaying bearish divergence to the price action over the last few weeks;coupled with the OBV indicator falling below its 1-month uptrend line, webelieve that the recent rally has weakened considerably.
- Hence we expect a pullback to the immediate support at around $2.66 (1-month uptrend line, also minor gap in mid Apr ’09 and the 200-day MA),with the next support at $2.40 (minor trough and gap in early Apr ‘09).
- Any upside from here will likely meet resistance at around $3.13 (Apr ’09high and 1-year downtrend resistance line), followed by $3.54 (minor gap inAug ’08).
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