Wednesday, April 22, 2009

Capitaland Technicals - OCBC

- After a rally of 84% over the last 1.5 months, CapitaLand may be heading for a pullback in the coming weeks; this as the recent price action has formed a dark cloud cover (bearish pattern) just below its strong 1-year downtrend resistance line.

- Technical indicators (Force Index, RSI and MACD Histogram) have been displaying bearish divergence to the price action over the last few weeks; coupled with the OBV indicator falling below its 1-month uptrend line, we believe that the recent rally has weakened considerably.

- Hence we expect a pullback to the immediate support at around $2.66 (1- month uptrend line, also minor gap in mid Apr ’09 and the 200-day MA), with the next support at $2.40 (minor trough and gap in early Apr ‘09).

- Any upside from here will likely meet resistance at around $3.13 (Apr ’09 high and 1-year downtrend resistance line), followed by $3.54 (minor gap in Aug ’08).

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