Mermaid – Laggard among the offshore movement?

Trend: Downtrend, 20ma down, MacD below 0

Support: 0.44, 0.485, 0.52 (20ma)

Resistance: 0.555, 0.63 (50ma close)

Observations:
Candlestick – One white candle after a black candle
Histogram –Many Gs, No bullish divergence is seen.
RSI – Slightly above 50%. Bullish divergence is seen.
Stochastic – Bullish crossover yet to be form. Around 50%
Bollinger Band – Close to mid band.

Conclusion:
As the market has rotated its interest in the offshore sector, it could be interesting to look for laggard counters in offshore sector. Mermaid could be one of them as it exhibit similar movement as the rest of the offshore counters. Will it catch up with the rest?
Mermaid’s chart still remains downtrend based on yesterday’s chart. It only exhibits bullish divergence in RSI. One key observation is that its weekly trend is still downtrend and is trading below all the moving averages. But base on yesterday’s action, it seems to be supported by 20ma, which could also means that it might more upside potential.
Hence, to confirm it upside potential, it must break the recent high of 0.555 level. Which implies that the next resistance target is 0.63 level. This possible upsurge could have change the trend of mermaid to uptrend, but will not change its weekly trend to be uptrend.
On the other hand, if Mermaid fails to hold at current support level of 0.52 level, there might be a potential downside risk to 0.485 support level. But if 0.485 support level holds, it could also form a higher low at that support level. To confirm the downtrend to continue, it must break 0.44 support level.
Currently, the indicators are still on the bullish side as there are no signs of bearishness yet. Hence, with slight conflicting signals with its trend reading, it will be better to be cautiously bull on Mermaid.
What to watch out for this week:
1) Breakout of 0.555 with high volume (more than 8.8mil)
2) Failed to break 0.555 but retrace to 0.485 where a possible higher low could be formed
3) Breakdown of 0.44 support

Trading strategy to adapt right now:
- Go long only when 0.555 resistance breaks with high volume.
- Wait for a higher low formation at 0.485
- Go short when 0.44 support breaks with high volume.

@ Disclaimer applies