Wednesday, April 8, 2009

K-REIT - Heading lower in the near-term


- As indicated by the confirmation of a hanging man bearish reversal candlestick at the $0.65 resistance level (breakdown gap in Jan ’09 and the upper boundary of the 4-month downtrend channel), K-REIT looks to be heading lower in the near term.

- Incidentally, both the RSI and Accumulation/Distribution indicator have signaled negative divergences to the price action, further supporting our view that a price reversal could be in the process.

- We see a possible pullback to the immediate support at around $0.57 (recent minor troughs and 50% Fibonacci retracement of the rally from Mar ’09 low to the recent Apr ’09 high), followed by the last line of defense at $0.485 (all time low)

- Any upside from the current $0.65 level will likely meet resistance at the next support-turned resistance level of around $0.70 (minor peak in Jan ’09).

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