- After rallying by more than 66% over the last 3 weeks, F&N is showing signs of fatigue with the formation of a tweezers top just shy of the 1.5-year downtrend line and key support-turned-resistance level in Aug-Sep ’08.
- With the technical indicators (RSI and Stochastic) showing signs of turning down inside their respective overbought regions and the ROC indicator signaling a bearish crossover recently, they suggest that the uptrend momentum is waning and correction may be imminent.
- We expect the stock to find initial support at $3.45-$3.50 (minor gap in mid May ‘09), breaking which, we see the next support at $3.00 (200-day MA and resistance-turned-support level)
- Immediate resistance is pegged at $4.38 (minor peaks in Aug-Sep ’08), ahead of $4.65 (support-turned-resistance level in Jun ‘08).
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