Noble Grp – Consolidation or reversal point?

Trend: Downtrend , 20ma down, MacD below 0

Support: 1.76 – 1.78 (rising window), 1.61, 1.50

Resistance: 1.84 (20ma & 200ma), 1.94 (50ma close)

Observations:
Candlestick – White star
Histogram –3G is seen. No bullish divergence is seen.
RSI – around 40%. Bullish divergence is seen.
Stochastic – No bearish crossover yet. Heading towards overbought.
Bollinger Band – Trading at mid band.

Conclusion:
Noble grp had a fantastic rebound after it had hit a support of 1.61, but the rebound did not change the trend to uptrend. Yesterday, it had managed to test 20ma resistance and the candlestick formation indicates that it struggled to break 20ma yesterday. But based on the indicators, the bullish momentum is still intact and could carry on going higher. But the current upside is capped by the 20ma and 200ma resistance of 1.84 level.
Looking at the RSI, it shows bullish divergence and could mean that the current downtrend is weakening and could have a change in trend. In order for Noble to turn uptrend, it must break 1.94 resistances for a higher high. But the current resistance at 1.84 is a tough nut to crack.
In order for Noble to continue its downtrend, a bearish signal must be seen in the next coming few days. On top of that, the rising window (1.76 – 1.78) that is created by yesterday’s action should be broken in order for a good downside to be seen. If the window is to crack, we can see Noble to seek 1.61 support level again. If 1.61 level refuses to hold, the next support could be 1.50 where we can conclude that this bullish divergence could have failed.

What to watch out for this week:
1) Formation of bearish candle which could indicates a lower high formation. Entry of short position when 1.76 level breaks
2) If there is not bearish candle, watch for a break of 1.84 level which could mean the downtrend might have end.

Trading strategy to adapt right now:
- One can consider establishing short position once 1.76 level breaks. But have to short cautiously due to divergence signal
- For those whom still have long position, it may be wise to reduce long positions here as there is a possibility that downtrend could continue.

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