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Will Resource Prima resume uptrend after consolidation?

Recently, STI was a bit volatile. At the end of 2014, STI broke above the resistance at 3350-3360 and tested the 1 year high of 3375. However, when it comes to the new year of 2015, it failed to break above 3375 and formed a false breakout. In 5-6 Jan, STI suffered a severe sell down for around 120 points in just 2 days. After the sell down of STI, what stocks should investors look for?

One possible idea is to look for uptrend stock that have shallow pull back during STI sell down because they are most likely to resume uptrend once STI start to have some rebound. As STI is already at the lower range it its trading channel, it is not very likely to go down a lot more. So the risk of this strategy is considered low.

Resource Prima is one of few uptrend stocks that investor may pay attention. The weekly chart shows that it is in a very clear mid to long term uptrend: both moving averages and MACD histograms are showing bullish signal. It is good trading opportunity to monitor uptrend stocks and look out for buy on dips during pull back.

Weekly chart:

From daily chart, it can be seen that the stock is still uptrend. Although the short term moving average already crossed down, the pace of sell down is much slower than that of up move which is an indication of uptrend. On the other side, when STI suffer sell down recently, Resource Prima managed to hold well, it is another sign of strength. Once STI start to rebound, Resource Prime is likely to go up and resume the uptrend. One may consider buy of the break out of the resistance at 0.23 and expect the stock to resume uptrend thereafter.

Daily chart:

Robin Han
Robin Han

Dr. Robin Han, a graduated from NUS with a Ph.D in Department of Chemical and Biomolecular Engineering, has been actively trading in Singapore stock market since 2007. His passion has let Dr. Robin to become a full time trader since 2010. He has extensively share his experience with his fellow investors on trading Singapore stock market using both technical analysis and fundamental analysis.

Dr. Robin is a regular guest speaker for radio 95.8 on financial program. He also has been invited by different companies and societies to conduct educational seminars on stock investments, including Shares Investment, Wealth Directions (Founder: Dennis Ng), Traders Round Table, SIM, Raffles Business International, Online trader's club and Alpha Alliance. He is also contracted by N2N (a listed trading software provider in Malaysia) as their overseas educational speaker in stocks.