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Bumitama: Will This Strong Stock Outperform The STI?
Trend Spotting | 16 November 2012
By: Robin Han
Articles (102) Profile

Bumitama Agri Resources (Bumitama) has been exhibiting strong momentum in the past five trading days. We all know that the Straits Times Index (STI) was very weak and has been dropping in the past few days. However, Bumitama has managed to hold well and its price even went up slightly in a bearish market. This is a strong signal of strength. From the chart below, we can see that Bumitama is likely to form a reversed head and shoulders pattern. The scale of this pattern is quite big, which indicates that once the pattern is confirmed, the price may have an impressive movement. If it breaks higher than the resistance at $1.045, the reversed head and shoulder pattern will be confirmed and a mid-term uptrend will be expected. If we look at the most recently published financial statement of Bumitama, we can see good financial results that could support a mid-term or even long-term uptrend: its revenue increased 22.6 percent whilst profit increased 15.6 percent. This company is reflecting healthy growth performance. In the event of a price entry, I will set the stop loss price at 1 bid below yesterday’s low.

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

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