Technical Pulse: ThaiBev Ltd September 4, 2018 1024

Technical Long

ThaiBev Ltd – Daily timeframe

*Entry Price: 0.655      Stop loss: 0.595     Take profit: 0.750

*ThaiBev Ltd will be added to the Phillip 20 Portfolio once the trade is triggered

Price has been stuck in a steep downtrend since November 2017 as the 20 and 60 day moving average relentlessly capped the recovery. Price has fallen as much as –38% off the November high of 0.985 to the new 52-week low of 0.605.

Despite price breaking a new 52-week low recently, the bearish momentum appears to be fading. The 0.600 psychological round number held up and seemed to be keeping a floor on price for now. Some sign of strength appeared on 31/08/18 after price rejected the 0.600 psychological round number and formed a dragonfly doji.

Keep in mind the recent selloff has taken the Relative Strength Index into the oversold territory since 15/08/18 suggests an imminent rebound higher. RSI measures momentum. A reading above 70 represents overbought condition while a reading below 30 represents oversold condition. The past few times the RSI entered into oversold condition, an average rebound of +9% happened shown by the highlighted boxes.

Thus, with the current bullish follow through on 03/09/18 after the dragonfly doji rejection, the RSI has risen back above the 30 oversold condition signals the start of the mean reversion higher next. Moreover, price has also broken above the immediate pullback line shows further sign of strength.

Expect price to make a near-term rebound next for price to test the 0.675 resistance area followed by 0.740.

Join our telegram channel on technical analysis for trends, entry and exit prices over Stocks, ETFs, and Indices!

Featuring regular TA posts and requests to analyse specific stocks
Click to join!
Notify of
Inline Feedbacks
View all comments

About the author

Profile photo of Jeremy Ng

Jeremy Ng
Research Analyst
Phillip Securities Research Pte Ltd

Jeremy specialises in Technical Analysis and has 10 years of experience in studying price action. His areas of expertise include intermarket analysis on the equities, currencies, commodities and bonds market.

He is also a regular columnist on The Business Times - every Monday ChartPoint column.

He graduated with a Bachelor of Science in Banking and Finance from University of London.

Get access to all the latest market news, reports, technical analysis
by signing up for a free account today!