The first question is what happen to this baby? That was the first question I asked myself when I bought the stock at 0.775 in December 2010, see it rise all the way to record high 0.83, sit there waiting for the stock to hit my profit target of 0.90, and witness its spectacular fall. I was puzzled that it didn't make it to my ideal profit level, given that the macro picture is quite rosy (i.e. commodity prices are rising, palm oil is in demand, inflation is rising alert, company is fundamentally sound with good ROE annually etc). Like what pro said, Market don't care about all these facts! Market does not care about what I believe, it is only reacting to what market players do. Thinking and doing are 2 different stuff. Example: Why does price goes down when good news are released? Because sellers are more eager and stronger than buyers! No other reasons; price speaks for itself. It is supply and demand 101.
Going to the technical picture, today price gap down and close the gap! Now price is trading around the 150MA, and below the 50MA which is sloping downwards. My analysis is not to enter too quickly and wait for confirmation in price action to enter. Entering now is like catching a falling knife; you never know how low is low! Short term support lies at 0.65 (confluence of fib), and mid term support is 0.60 (top of trading range). Let's see how price reacts at those levels. ** Do note we have a bullish reversal candle formation called piercing pattern.
Until then, hope everyone profits and have a great CNY ahead!
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