NOL - trading idea

At low end of June’s $1.44-$1.62 trading movements withminimum daily finishes at $1.46-47 and daily highs of $1.55-59offering 5-8% spread.

Since the end-May breakout from $1.20 to $1.64 high in early June, NOL has been underpinned by its rights issue the trading of which ends tomorrow.

Although $1.64 ie the 38.2% fibonacci mark of its one-year chart from $3.04 high to 77c low in March has proven to be a major hurdle, the stock has stayed well above the 23.6% point at $1.30.

Today it comes closest to the middle Bollinger band ($1.46) since the end-May breakout, a sign of support coming in.

14-day RSI at 52.6 is also at level before that breakout while 7-days (at 45.3) is even more suggestive of a small technical rally taking place.

The counter has resumed trading below 13-days simple moving average (at $1.52) and the fact that it manages to spring back above this buy signal line for much of the past fortnight indicates its strength to move to $1.55-59 within intra-day trading.

In another sign that support is strong at $1.45-46 is the 30-day MA at $1.45 which has stayed well below daily price since end-May until today.

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Dangerous if DJIA break below 8,250

Please take note that unlike other chartists, the 200DMA I used is a smoothen MA known as EMA. As such you may ask why my DJIA chart is below 200DMA compare to other which saw their DJIA above 200DMA.

DJIA - as you can see it is unable to cross my 200DMA line (Blue color) after many many attempts. The recent pullback has started to see another bearish signal, i.e the short term moving averages or STMA (group of lines in white) has penetrated the Long term moving averages or LTMA (group of red lines) as defined by Guppy as a Bearish signal. As you may know, once the STMA goes under the LTMA, a downtrend will be established

CDL HTrust - Stalling of rally at key resistance heralds possible near-term downside

CDL Hospitality Trust could be facing more near term downside as the price seems to have stalled at its key $0.845 resistance (also hit the upper Bollinger band) on relatively high volume. A lower close today would confirm the bearish price reversal.

And downside momentum looks set to accelerate in the near term. The RSI has already turned down just shy of the overbought region while the stochastic indicator is about to make a negative crossover inside the overbought region. The Accumulation/Distribution indicator also made a sharp bearish reversal yesterday.

We expect the stock to find initial support at $0.79 (2-month uptrend line and centre Bollinger band), breaking which, the next key support is likely at $0.72 (minor troughs in May ’09 and Jun ’09 and lower Bollinger band).

Above the $0.845 key resistance, we see $0.92 (minor peak in Oct ’08) as the next resistance.