Swiber - Latest 21.3% plunge from historic $1.08 resistance

The stock is undergoing a sizeable correction on similar scale as mid-May when it plunged 23.6% from 97.5c to 74.5c.

Due to failure of 4 attempts to clearly break historic $1.07 resistance at end-May (highs of $1.06 to $1.08 reached) it has fallen 21.3% to 85c low yesterday below another multi-year 94.5c support and close to the next one at 82.5c.

A repeat of the mid-May plunge will take it exactly to 82.5c, which should be a strong support, more so now that the counter is trading below its 13-day MA buy signal (96c) for the 8th day in a row.

Surprisingly during the mid-May correction Swiber held up well above this MA and this is the longest stretch since the March 23.5c bottom that this is happening.

A 38.2% retracement of the run-up from 23.5c to $1.08 ie to 76c (near mid-May low of 74.5c) is unlikely.

This is because longer term MAs are all bullish with the 50 and 200 days making a golden cross recently while the 100 days is heading towards another cut with 200-days.

RSI at 51.3 is at lowest since end-April 46.2 at point when it broke out past 50c. The weekly MACD is still on the rise having cut its MA.

With the stock out of downtrend channel a trading range around 83-94c is likely as the stock builds a new base for another assault at $1.06-08 in coming weeks.

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Sell technically Golden Agri, Swiber, F&N

Golden Agri-Resources (GGR SP; S$0.36) – SELL

• Golden Agri (GGR) posted a dark cloud cover candle last week. It is also trading very near a cluster of resistances, which increases the chance of a reversal. S$0.385-0.40 and S$0.42 are strong resistances.

• Technical indicators are starting to weaken with the MACD and RSI hooking downwards. RSI has also issued a sell signal last week.

• Any rebound towards the resistance levels should be seen as a chance to sell. Immediate support is at S$0.35, but we do not expect this level to hold.Stronger support is at S$0.32 and S$0.29.

Golden Agri-Resources Limited cultivates, harvests, processes, distributes, and sells crude palm oil and palm kernel. The Company also refines crude palm oil into cooking oil, margarine, and shortening for sale and distribution.

Swiber Holdings (SWIB SP; S$0.515) – SELL

• Appears to be hitting robust resistances. The bearish implication of last Thursday’s candle would likely be felt soon. Take profits now as resistance at S$0.525 and S$0.56 is likely to cap any more upside for now.

• MACD is flattening out suggesting that the buying momentum is starting to ease. RSI has hooked up again but is still below its previous highs.

• A break below the S$0.495 could see more selling pressure set in. The next support is at S$0.445 and S$0.385.

Swiber Holdings Limited is an offshore marine support company. The Company services include engineering, procurement, and construction services.

Fraser & Neave (FNN SP; S$2.71) – SELL

• The stock is now at a critical juncture. It needs to breakout and close above the S$2.72-2.75 resistance trend line to turn bullish again. If the resistance is broken, then the next resistance is at S$3.00.

• However, we think that this resistance will not give way so easily. MACD and RSI are still marginally positive but they are below their previous highs. It could potentially be a negative divergence here but we need further confirmation.

• Nevertheless, we think that it may be wise to take some profit here. If the breakout does take place, then investors could still get back in albeit at a slightly higher level. However, if the breakout fails to materialise, then it could ease to test its support at S$2.55 and S$2.38.

Fraser and Neave Limited produces and sells soft drinks, beer, stout, dairy products, and glass containers. The Company also operates publishing and printing businesses and develops and invests in properties.