Wednesday, August 21, 2013

ShareInv Article: Wing Tai's Uptrend At Risk?

Wing Tai Holdings has been one of the best performing stocks in Singapore since the beginning of 2012 till today. The uptrend started when it was trading at just about $0.915 and after an amazing 20-month rally, it is now priced at $2.05.
Looking at the weekly chart, Wing Tai’s long-term trend is supported by the trendline I have drawn in black. This line, however, coincided with the 40-week moving average (which is also the 200-day moving average), hence we see that the strong support is currently at $2.00. We may see further downside if its share price break below this level.
Weekly Chart On Wing Tai
Weekly Chart On Wing Tai
Looking at the daily chart, Wing Tai has formed a head and shoulders pattern since December 2012, the first and third peak are the shoulders and the centre peak forms the head. In technical analysis, this pattern is a sign of a trend reversal. With the price breaking below the 50-day moving average recently, the chart is telling us that in the mid-term we should not be holding this counter. Based on the previous trend, Wing Tai usually moves higher when price is above the 50-day moving average. Therefore, I will be bullish again when the price move higher.
Daily Chart On Wing Tai
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