Nenix's Take on Kim Eng
ATR
The decision to enter Kim Eng was slightly mixed because i reacted quite slowly when I realised the trend. Basically, the trend was showing positively two weeks ago, but i hesitated because the upside seems limited. Anyway, the analysis is as shown below.
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 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.
Reproduced with permission from http://nenixdreams.blogspot.com
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