ARA Asset – Uptrend Despite uncertainty

Trend: Uptrend, 20ma up, MacD above 0

Support: 0.975, 0.95 (20 & 50ma close)

Resistance: 1.00, 1.03

Observations:
Candlestick – Dark cloud cover.
Histogram –4G1R, No bearish divergence.
RSI – around 70%. No bearish divergence.
Stochastic – Already have bearish crossover. Just out of overbought
Bollinger Band – Out of upper band.

Conclusion:
Ara Asset is surprisingly bullish in the current market condition. It refuses to correct like the general market and it seems to have its own heartbeat. One of the possible contributing factors could it of its defensive nature based on fundamentals. So how does ARA far based on charts?
Ara Asset is now trending in a very obvious uptrend as the strong rebound during last few weeks brought this stock above all the moving averages. But this strong movement might have hit a resistance of 1.00 as it starts to form a dark cloud cover yesterday. There is a chance that it might form a high now as the indicators are indicating bearish signals.
Hence, retracement is on the cards right now for this stock. The retracement target could be towards 0.975 support level, but a more convincing support level is at 0.95 as it confluences with 20 & 50ma. If it got supported at these levels, a higher low could be form which could yield a good opportunity on the long side.

What to watch out for this week:
1) Retracement to 0.975 or 0.95 level.
2) Breaking of resistance of 1.00 level.

Trading strategy to adapt right now:
- Counter trend trading could be adapted right now but have to watch for support at 0.975 or 0.95, which does not yield good risk reward.
- Wait for retracement to support level and watch out for bullish signal to go long..

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