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Upside Momentum Still Intact For Straits Asia Resources
Trend Spotting | 22 November 2010
By: Xavier Lim
Articles (51) Profile

Straits Asia Resources (SAR) gapped up to form a white ‘marubozu’ candlestick on 19 Nov-10, after a ‘doji’ has appeared. Coincidentally, the ‘doji’ was formed above the psychological resistance of $2.40, indicating the bull has not been beaten by the bear.

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In addition, the 10-day and 25-day moving averages are still in the bullish crossover, signaling that the short-term picture is still biased towards the bullish side. You may also notice that the RSI indicator has been fluctuating within the range of 80 – 50, while SAR has been moving up the uptrend channel. All these signals suggest that the upside momentum remains intact.

Immediate resistance lies at around $2.74, this is its highest price attained for the eleven months of 2010. Immediate support will be at $2.35; below this price, SAR will be out of the uptrend channel, indicating that net-demand has weakened and a change in trend could be imminent. Suspect that SAR will move up steeply to hit another key resistance of $3.40, a Fibonacci retracementratio of 76.4% (refer to the chart below).

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Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

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