UMS Ltd – Monthly timeframe (Update from 29 September 2017)
Take profit: 0.985
Current Sentiment: Bearish
Support 1: 0.940 Resistance 1: 1.075
Support 2: 0.825 Resistance 2: 1.180
The long-term uptrend resumed as expected after the last update as price broke another new record above the 1.000 psychological round number thereafter. However, price might be in the midst of a major trend reversal to the downside after it hit a new 52-week high of 1.180 on 22/11/17.
On the monthly timeframe, the heavy selling at the end of November resulted in price forming a noteworthy shooting star in November. Moreover, the bearish price action happened with an extremely overbought Relative Strength Index (RSI) at 74 signals a high likelihood of a reversal to the downside next. Notice how the extremely overbought RSI in the past tends to lead to a sharp correction in price shown by the highlighted boxes.
Expect price to remain depressed moving forward as it goes through a period of correction.
Hence, with the current bearish price action on the monthly timeframe, we have decided to close out our position in UMS since 29 September at 0.985. As a result, this trade contributed to an equal-weighted gain of +1.17% to the “Phillip 20 Portfolio.”