SKYEBANK: Stock is at an extreme oversold territory; bears may lose control


Wednesday, December 23, 2015 10.30 AM / Harish Shahi, The Analyst 

A closer look on the daily chart of SKYEBANK reveals that stock is heading towards south side and is falling down due to pressure from the downtrend line and making successive lower highs and lower lows.

Stock is constantly moving down from N2.90 to N1.18 level but after arriving at an oversold territory, we saw some reversal signal in terms of counter-attack. As bears could not sustain at that level, the bulls took charge. In the last 3 days, the bulls have been dominating the bears and heading towards north side.

From technical perspective, we can see that a bullish divergence of CCI indicator on the daily technical chart is providing bullish signal. The stock has arrived at N1.20 level which is an extreme oversold territory where bears were expected to lose control from the stock and the bulls were supposed to take charge but they did the same. Well the way bulls are reacting it seems that they are approaching N2.00 and N2.80 level in short term.

Presently stock is trading below all major and minor EMA lines and providing bullish signal. Settling above N1.80 level will provide further presence of buyers and will also provide more strength to the bulls; this could trigger acceleration to the upside with N2.20 as next target.

All odds are in favor of the bulls and indicating a bullish signal. Both investors and traders are displaying bullish tendency towards the stock for the time being.

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What Next?

A piercing candlestick followed by bullish marabuzo candlestick pattern is generating bullish signal for the time being. A bullish crossover on MACD indicator is also favoring the bulls. Both RSI and CCI indicators are providing bullish signal from a negative territory.

Intraday bias remains bullish on the stock as long as N1.00 level remains intact. The N2.00 level is key resistance level followed by N2.40 whereas N1.00 can be considered as key support level followed by N0.80 level.



Trade Idea:
Based on the charts and explanation above, traders can buy this stock at N1.34 level for the target of N1.80 and N2.00 with tight stop loss of N1.00 level. The tentative time frame would be 6-8 days.

NB: Return on Investment based on trade idea above does not take cognizance of brokerage commission

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