Capitaland looking bullish

Evening traders/investors,

I have an analysis of Capitaland for today.

In my last post on Capitaland – which was quite a while ago – Capitaland disappointed me in my intial bullish call; I reversed my view because the chart told me so, and true to analysis, Capitaland continued in a long-term downtrend (I take more than a year as long-term for trading purposes). Capitaland bottomed out late last year, and staged a 30% climb at the start of this year. It was not an easy ride for longer-term traders as Capitaland nose-dived to test lows at $2.40; however, Capitaland – together with other property counters – flew back up above $3.00.

I have been keeping a potential pattern on Capitaland’s chart in my chart station. Because of today’s 3.5% surge on high volume, the pattern is confirmed – an inverted head and shoulders. Price action preceding the pattern is not ideal at all since basic theory suggests that there should be a downtrend leading into a bottoming inverted head and shoulders. In Capitaland’s case, even though Capitaland came out of a long-term decline, the price action immediately preceding the inverted head and shoulders is a 30% rise. For me, I am flexible when it comes to price action preceding a pattern. So, I will regard Capitaland as coming out of an inverted head and shoulders.

I like how the moving averages are looking bullish too. The GMMA indicator, which is basically a bunch of moving averages, looks good on the daily and weekly charts also. Overall, the chart seems to tell me two things: one, Capitaland is definitely out of the 2010-2011 downtrend; two, Capitaland looks like it is at the initial stages of a long-term uptrend. The problem is that I cannot know for sure what will happen. Capitaland may just trade in a very volatile range. For now, it does look quite bullish especially because of the upward breakout from a pattern.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

 

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