AirAsia - Still in a downtrend

AirAsia rebounded for the last 3 session. However, the bearish pattern formed by the 10 day, 20 day and 30 day moving averages is still intact.

The rebound can be viewed as a technical rebound and the fact that it is not able to clear it's 20 day and 30 day moving averages is a sign that the bears are still in control.

There is a high possibility that the price will test RM1.27 in the next few sessions. If this level is taken out, the next support is at RM1.22 level.

All bets are off if price moves above RM1.37.

Kuala Lumpur Kepong Bhd

Kuala Lumpur Kepong Bhd was down 28 cents on Friday’s trading session. It closed at RM 16.62, just below it’s 8 day moving average.

So where do we go from here?

The US market did not move much on Friday night. The Dow ended at 10,624 up 12.85 points. The indecisive market action will not bring much cheer to market participant.

For Kuala Lumpur Kepong Bhd, the technical charts are showing a slightly bearish picture.

Firstly, the –DI is above the +DI which suggests weakness. However, the ADX is still at very low levels suggesting that a sustained down trend is not in the cards.

The MACD indicator is making a bearish crossover, moving below it’s signal line.

One way to play this stock is to short the counter on the next trading session at price that is slightly above RM 16.62, the low set on Friday. The stop loss should be at the RM 17 level.

The 2 day RSI for this counter is going downwards and is approaching oversold levels. The next one or two session will be weak for this stock and if you can short at RM 16.62, there may be a chance to walk away with a slight profit.

Good luck and happy trading!

Genting Bhd

US market had a good performance on Friday with the Dow Industrial Average moving up 122 points to end the week at 10566. Volume on Friday was far from impressive showing a lack of participation among the traders.

Now let’s look at one interesting counter, GENTING BHD.

The technical picture was pretty bleak in the beginning of the week. The counter broke through it’s 200 day moving average and showed no signs of rebounding. However, the counter sprang into life on Friday and the counter is now testing it’s 200 day moving average once more.

The MACD indicator made a bullish crossover and is a good sign for the bulls in the short term.

The RSI indicator is not at oversold levels yet, suggesting that the up move still has some legs left.

However the –DI is still above the +DI with the ADX turning down. This suggests a slowing down of the down trend.

Given the current market conditions, I would be a seller if the counter managed to get to RM 7.00.