Capitaland – Will it China exposure affect its price?

Trend: Downtrend , 20ma down, MacD below 0

Support: 3.52, 3.30

Resistance: 3.74, 3.88(20ma close), 3.96 (50, 100 & 200ma)

Observations:
Candlestick – White spinning top
Histogram –4G. No bullish divergence is seen.
RSI – Around 30%. No bullish divergence is seen.
Stochastic – Bullish crossover already seen. Out of oversold.
Bollinger Band – Bounce out of lower band.

Conclusion:
Capitaland enjoyed a strong rebound following the index. But this rebound could be a shorting opportunity as the trend is downtrend. Hence, Capitaland’s rebound could be forming a lower high. Possibility of lower high could be formed at 3.74, 3.88 or even 3.96 levels. 3.96 will be the strong resistance level of all as there is a strong confluence of 3 MA lines. The indicators are still looking pretty bullish for the short term and yet to show signs of bearishness. But since it is now trading as a downtrend, the bullishness should be short lived.
To confirm the continuation of the downtrend, we have to watch out for bearish candlestick formation and also bearish indicators from the indicators. Currently, there might be a chance of a bearish reversal candle formation at 3.74 resistance level.
Capitaland’s downside potential could reach up till 3.52 support and even 3.30 support, as chances of forming lower low for downtrend stock is highly possible.

What to watch out for this week:
1) Formation of bearish reversal candle at 3.74 resistance level
2) But if no bearish reversal candle is formed watch for the 20ma as resistance.

Trading strategy to adapt right now:
- Wait for a bearish signal to form and initiate a short position when there is confirmation
- For those whom still have long on Capitaland, considerations to clear this position should be high as the next support could be quite far.

*Disclaimer applies