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Innovalues’ potential bullish break in the making? (3 Jun 16)

By Ernest Lim

Innovalues’ potential bullish break in the making? (3 Jun 16)

On 17 May 2016, I wrote that Innovalues’ profit taking may be over soon (see here) and a break above $0.925 – 0.935 on a sustained basis should negate the bearish tinge in its chart. It was coincidental that Innovalues surged 6.5% or $0.060 to close $0.985 on the following day (18 May 2016) on strong volumes and has not traded below $0.925 since then.

What’s next for Innovalues? Read on for more.

Chart analysis

After hitting an intraday high of $1.015 on 23 May 2016, Innovalues has been consolidating its gain. Based on Chart 1 below, it seems to be forming a potential bullish flag formation. If Innovalues can breach $0.980 with volume expansion and on a sustained basis, an eventual measured technical target price is around $1.080. It is noteworthy that Innovalues has successfully tested its 21D exponential moving average (“EMA”, currently at $0.970) six times since 19 May 2016. All the EMAs are rising with a consistent degree of separation between the different EMAs which is indicative of a well-established uptrend. Furthermore, the price consolidation after hitting an intraday high of $1.015 on 23 May 2016 was accompanied with relatively low volume. The trading volume for only two days (out of the 12 trading days i.e. 19 May – 3 Jun 2013), were accompanied with volumes greater than 100D volume which was around 1.87m shares. (Ave 30D volume amounted to around 2.6m shares). Innovalues closed at $0.980 on 3 Jun 2016.

Notwithstanding the above possibly bullish chart setup, a break below $0.930 with volume expansion and on a sustained basis negate the bullish tinge in the chart.

Near term supports: $0.970 / 0.945 / 0.930

Near term resistances: $0.980 / 1.010 – 1.020 / 1.080

Chart 1: Innovalues’ potential bullish flag formation


Source: CIMB chart as of 3 Jun 16

Conclusion – Innovalues’ chart worth to take note

In view of the above noteworthy factors and based on Chart 1 above, my personal opinion is that Innovalues seems to be forming a potential bullish flag formation. Readers should consult the various analyst reports, Innovalues company website (click here) and my previous write-up dated 17 May 2016 (see here) for more information.

Disclaimer

Please refer to the disclaimer here

 
Ernest Lim
Ernest Lim

Ernest is an avid investor, trader cum remisier. He is a Chartered Financial Analyst® charterholder, as well as, a Chartered Accountant of Singapore. He has published articles on a wide range of topics on finance and investment on his blog http://ernest15percent.com/, ranging from market / sector outlook, technical analysis and fundamental analysis etc. His writeups and comments have been featured in various online and mainstream media such as Bloomberg, Business Times, Lianhe Zaobao, Sharesinvestment, Nextinsight etc.

He has worked at GIC Special Investment and was with Legacy Capital Group Pte Ltd, a boutique asset management and private equity firm, as an investment manager for high net worth clients, after which he went to work as an investment manager before embracing his lifelong passion as a remisier.