Wilmar – Preparing for breakout?

Trend: Uptrend, 20ma up, Macd above 0

Support: 6.19 (20ma),6.00 (50ma)

Resistance: 6.30 (100ma), 6.42 (200ma), 6.71

Observations
Candlestick – Black candle with longer lower shadow but upper shadow testing 100ma.
Histogram – Many Rs. No Bearish divergence is seen.
RSI – Around 50%. No Bearish divergence is seen.
Stochastic –Bullish crossover yet.
Bollinger Band – Close to Mid band. Squeeze.

Conclusion:
Wilmar has been sluggishly trending upwards and recently, it seems that it is starting to trend in a narrow range. So, is Wilmar now consolidating for the upside or for the downside?
Based on Wilmar’s current trend, it is now in an uptrend and had already formed a higher high. Hence, there is a possibility that a higher low is to be formed. Currently, it is trading at 6.19 support level which confluences with 20ma. Based on yesterday’s candlestick formation, it has shown signs that it cannot break 6.19 support level. But it has also shown that it cannot break 100ma as resistance. This could explain why Wilmar has been trading in the narrow range as it is now bounded but 20 & 100ma range.
Based on the indicators, there are some bullish signs from Stochastic as it had a bullish cross yesterday. Hence, there could be a possibility that 100ma could break. But upside could be capped by 200ma which can be a hard nut to crack. If Wilmar is able to crack this strong resistance level at 6.42, there would be a better upside range for Wilmar to surge to. Based on Bollinger band, there might be a possibility of breaking for the upside as it is starting to squeeze.
In conclusion, Wilmar might be starting to form a higher low. But to confirm the higher low, 6.30 level must break first to confirm the bullishness. However, entering after the level break does not yield good risk reward as 6.42 is a strong resistance level. Therefore, it is better to wait for 6.42 level to crack to achieve a better risk and reward.

What to watch out for this week:
1) Breaking of 100ma at 6.30 level
2) Breaking of 200ma at 6.42 level

Trading strategy to adapt right now:
- Long when 100ma breaks (Bad risk reward).
- Long when 200ma breaks (Better risk reward).

Disclaimer applies.