Analysis on Golden Agriculture (240912)

For today, my analysis will be on Golden Agriculture. A company which engages in cultivating and harvesting oil palm trees. And refining the crude palm oil into consumer products comprising of cooking oil, margarine, and shortening.

* These indicators and tools are based on my preferences and within my comfort zone. For reasons on why i chosen them, you can view my later blog posts. But i do encourage fellow traders to have their own indicators. Indicators that are "close to their heart". Books can only give you this much, at the end of the day, trading decisions will still have to be made by you. Hence, "YOU" are the weakest link.

 My setup

Chart Set up

1. Weekly and Daily Chart (Courtesy of Chart Nexus)

 

Moving Averages

1. EMA 200

2. EMA 55

3. SMA 35

Indicators

1. MACD (9, 26, 13)

2. Resistance / Support Line

 

Ok, lets do a little analysis.

Weekly Chart

A little tip which i learned from some of my "Shifus" / Masters, if you are not sure where the stock is heading, look at the BIG picture. Hence my weekly chart. Can you see what i see? From Oct 2010 till now, the stock has been making higher lows. Yes, there were times where the price traded down. But using the weekly chart, i can safely gauge that the trend is still on the  uptrend. If there's anyone who doesn't agree with me. Please air your thoughts. Or if you still can't see where the market is heading. I suggest that you get your kid to see it.  I am not kidding, another tip from some of my masters. As adults, we think too much..kids gives the best advice.

Support Areas

If you look at the 2 greenish lines which i have drawn, they could be support areas which the price would rebound. And our current price is touching the uppermost greenish line. If this support doesn't hold. There is the second support below. As of now, we can only observe. I sure hope it would rebound on the first line...

Resistance Areas

Although far from it, i have actually indicated three resistance areas. ($0.81, $0.785 and $0.77) These are points which could cause some resistance in price breaking up. But as of now, we need not worry about them...but i would suggest to take note

 

 

Daily Chart

With the weekly chart giving us a broad picture, now we will zoom into the daily chart.

As indicated earlier, the trend still looks like an uptrend. My support and resistance lines are also within what i have mentioned earlier. Only this time i have added the moving averages into the daily chart. To give you a clearer picture, lets zoom in further.

EMA55 (Purple Line) / SMA35 (Red Line)

Price is actually trading way below the 2 moving averages. Hence i would say that the price is oversold. Coupled with the support lines i have added earlier. This could give an indication that price could turn back to fair value. But if it breaks the 1st support line, there is the 2nd support line to break the fall. (But of course, theoretically it could happen. But do not anticipate. Thing may not go your way). Who says trading is predictable....

EMA 200 (Orange Line)

For now, EMA 200 has actually become a resistance line. Look at the translucent blue circle. Price actually hits EMA 200 and did a reverse down. If prices were to rebound from one of my support lines, EMA 200 might be the line to look for to resist the price breakthrough. Again, have to observe.

MACD

I am not sure whether you can see it, but it looks like MACD is making higher highs while price is making lower highs. Hence a bullish divergence.(Refer to the red arrows). Very subjective, some may not agree with me. But i would use this as indication if the current price rebounds from my support lines.

My "Conclusion"

I would say that if the price does not break the support lines and in fact rebounded. I might go long for the long term. I will then observe the price movement if it touches EMA 200. 

Furthermore, i believe the price is oversold. Hence climbing back to fair value could be possible.

For short term investors, there are various opportunities in playing this game. One of them would be the play from Support line (Red 1) to Red 2 or the rebound from Red 1 or Red 2. Again, up to your risk appetite. I am quite Kiasee, long term would be good for me...did i mentioned Golden Agriculture also give dividends?

 

I will be posting Golden Agriculture's price movement in the next few days to see whether my analysis are accurate. So do stay tune for the next post!  

 

Lastly, i would like that everyone to share your thoughts. Because we are all here to learn and exchange ideas. I may have left out something which might prove crucial or there are some other indicators which may be better for the analysis. So please share!

Whatever i present here is and still is based on my analysis. It does not constitute the setup of a trade. You will have to come up with your own analysis to back your own findings. Heck, i may even be wrong too. But i always manage my risk.