Price/Vol Analysis - Cosco Corp
Chart taken from iOCBC - 5min per candle from 10April to 11April.
I notice a lot of discussion of Cosco in CNA forum so to boost blog view, I come out with a price/vol analysis. Please note that the analysis is purely based on Price/Vol (it is very rare analysis but I believe Price and Vol is the best indication on short term trading) and only take this as educational purposes, please consult your advisor before induce any trading.
Two wall of resistances are built at $3.18 and $2.94 when huge sell down were taken place. Look at the sell down volume, huge vol sell down with thin volume buy up and continue with huge sell down with thin buy up. Now that you understand why price can't close more than $2.94.
If you were the one who sell down 17000 lots ($50million) at $2.94, will you allow price to go up without buying or covering cheaper? In order to sell down shares of $50million, the one who sell down is not a small fly. However I believe after the first sell down on 10 April 1100, small accumulation starts to take place but the earning is not good enough by looking at your 'investment'. Thus sell down continues to push the price down and accumulate below sell down price to replenish/cover earlier sold shares.
The next day 11 April 2008, the volume is not as thick as 10 April 2008. It is not easy to accumulate because there is not enough fear, the price can't move down due to psychological $2.80-$2.85 support.
Large sell down thin buy up that's already a no good sign ahead. If sentimental is good, the price will go sideway until accumulation is done. If sentimental is bad, continue the sell down to next support level while accumulate bits by bits simultaneously.
Retailers what to do? Long term investors, if you believe long term you have to hold and the fact is you need to see the price go down into water. If you are contra-ians, normally it is hard to trade unless you are skillful enough.
Risk level: Short term (Medium to High), Long term (entry price at $2.90 is low risk, you might get cheaper).
