Osim at giddy heights

Good day all,

I have a post on Osim, O23.SI, for today.

In my last posts on Osim, I identified an ascending triangle with an initial downward breakout. Osim rebounded at the $1.10 mark, and started heading up quickly. A once bearish scenario flipped altogether as Osim broke through resistance from the triangle at around $1.30. Also, price came back above the 200-day MA, and a strong march up meant the heavy MA started to turn upwards as well. Highlighted in yellow on the chart below is the area where Osim officially busted the ascending triangle which had a downward breakout. It was a tricky situation since Osim sustained heavy selling pressure at that relatively high region (yes, I was stopped out of a trade there). But, buyers took control and convincingly drove Osim into $1.40 territory. With the target hit weeks back, what can I then see on Osim’s chart now?

osim

First off, take note that Osim is at very high levels relative to 2 years ago, and all-time price action. Osim fell from grace in 2006-2007. And, the financial crisis in 2008 only made matters worse. If you do not track Osim’s share price, let me remind you that Osim’s share price has hit single-digit in cents before – 5 cents. Look at the chart again, Osim is now at the high side of the $1.00-$2.00 range. This is incredible performance for a stock of any kind. The rally stopped in late 2010 to the early months of 2011. Lo and behold, Osim is right back at those levels again.

The problem I have with following the trend, and “buying high, selling higher”, is that negative divergences are showing on Osim’s charts. I respect divergence/convergence signals between indicators and price a lot. In my experience of looking at charts, these signals are very accurate. Below, I show the MACD indicator that shows a clear-cut bearish divergence. Does this mean that Osim may suffer from profit-taking in the coming days? Objectively, since I respect such signals so much, I have to be wary of Osim’s uptrend. In the long-run, there could be further upside to chase all-time highs at the $2.00 area. But, for now, I will look for downside or consolidation.

osim1

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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