I entered OKP when the Trendline crossed over at $0.31 on the week of 6th to 10th 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.
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