Nenix Dreams

Trend Direction

The 12w trend line crossed over the 26w trend line at a price of $1.47. Although I entered slightly late, I manage to get at $1.50. Although it crossed over, I deliberated in getting into this counter because the upside seems limited. However, this is something that I should not have done because I have allowed personal opinions to influence me. 

Trend Strength

Trend strength seems to have waned in recent weeks, suggesting that it might go through a corrective phase. However, the +DI and -DI are going in favorable direction, the former going upwards, and the latter going downwards.  If this persist, the trend strength would be able to pick up, moving in a favorable direction.

ATR

ATR is showing a decline which is a sign that prices are stabilizing. This is a common trait among most stocks after the panic selling situation that we face last year. The volatility range is about $0.113 per 14w, which is approximately 7.53% in 14w.

Momentum

Momentum is on the strong side with little consolidation. Coupling with the possible scenario of trend strength bottoming out, it is likely that the momentum will continue to be on the upside.

Volume

Volume has been consistent and not much analysis can be made out of this.

Conclusion

Although the trend is on the up, the upside seems to be limited. However, the trend strength as represented in the ADX trend signifies that divergence between the +DI and -DI might continue and thus indicating a increasing trend strength. Momentum is still strongly on the upside with minimal contraction.

On the aspect of volatility, it indicates an approximately 7% movement in 14 weeks, which seems acceptable. 

The rationale of entry is due to the trend strength, the sustained momentum and the acceptable volatility.

I entered OKP when the Trendline crossed over at $0.31 on the week of 6^th to 10^th April, together with Wilmar. The reason it wasn’t published is because I thought Wilmar would require more focus. Anyway, the analysis below is based on my thoughts at that point of time and I will try as much as possible not to include hindsight analysis (knowing that it is in the $0.50 region now.

Trend Direction

As mentioned, this is the “must” criteria for my entry and the 12w crossed over the 26w. The crossover was rather convincing as it is testing a new “high” since the 52w low of $0.13.

Trend Strength

Trend Strength was still on a decline even though it seems to be changing in direction. This indicator in this instance is not very indicative due to the lack of trading volume.

That said, the +DI hit the 40 mark, which signifies its strength in uptrend while the –DI is nearing the 20 mark. This gives clear indication that it has strong uptrend (if you can put aside the fact that this indicator is not indicative)

ATR

It is on a decline and it is a good sign as considering its liquidity, this should have wild swings in prices, but the falling ATR indicates that the stock has already found some ground and is stabilizing.

Momentum

Momentum seems to be cooling down and it might be possible that there will be some correction going on, though the indication is not strong.

Volume

Volume has been the main issue in this stock and no trend can be obtained as its trading volume is not consistent. (*This issue should now be better due to placement shares)

Conclusion

The risk mainly comes from the inconsistency in volume, thus incurring quite a significant liquidity risk. However, the main trend is on the up and with decreasing ATR, it seems that the stock has finally found some ground. Trend strength indicates the direction is going up.

All in all, the long term uptrend is going up BUT if you look at the shorter term snap shot, this is a good opportunity for profit taking as it is overbought. It won’t be surprising to see profit taking in the next few weeks and this applies to all stocks as well. And it might even test the previous lows.