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Bearish Outlook For HKLand?
Trend Spotting | 18 October 2011
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By: Robin Han
Articles (102) Profile

Based on my experience, price and volume are very important indicators in the stock market. They provide a lot of information for us to identify where a stock may be heading. In this article, I will discuss stocks from the angle of price-volume theory. My price-volume theory has a few assumptions:

  • The price of a stock is decided by both buyers and sellers.
  • The transaction volume indicates how compatible are the views of the two parties.
  • Significant volume fluctuation cannot be initiated by individual investors whose funds are usually limited. Only investors with substantial funds can change the trading volume significantly.
  • Price can be manipulated but volume cannot be hidden. Therefore, volume indicates the real intention of big money most of the time.

HKLand have been dropping for around 3 months. Mid- to long-term outlook, it is weak. Recently, it has rebounded for 9 days. However, we can see that the volume is decreasing. According to price-volume theory, this indicates that there are not many investors who want to take action to join the rebound, which may result in a sell down when the price is relatively high.

On 13 Oct, it traded near the resistance of $5.16 with significant volume increase. However on the next day, HKLand went down despite the STI advancement. This showed that on a short-term basis, the stock has become weaker than the STI and is likely to go down in the next few days. The immediate support line is at $4.15. In addition, the stock has broken down the ascending triangle on 14 Oct. In conclusion, HKLand has become weak and is likely to start going down in the next few days.

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Daily Chart of HKLand

Robin Han is a Ph.D in Department of Chemical and Biomolecular Engineering and has got a solid foundation in the financial markets.

Please click here for more information about this author.

Hongkong Land Hldgs  5.530 +0.02 +0.36%   
Business: Co is principally engaged in the business of investment, management and development of properties in key Asian cities of Singapore and Hong Kong. [FY18 Turnover] Sales of properties (57.5%), rental income (36.9%), service income (5.6%).

Insight: Feb-19, FY18 revenue rose 64.9% with Co's investme... Read More

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