Stocks at their supports simply mean that there is demand at that price level. A good practice for traders would be to buy when the stocks touch and stand above their support lines.
Raffles Medical Group (RafflesMG) is a very low volume stock. It has been trading side-ways, ranging between $2.05 to $2.50 since late 2010. Currently, the support is at $2.05. We believe that there is a strong support here because it has been tested four times in the past two years. Testament to its strength, this support still holds even when the market is seen going down recently. As a saying goes, “What doesn’t kills you, makes you stronger”, should the market turns around, RafflesMG is one stock worth looking at.
If you wish to enter, make sure the low of the daily candle is above $2.05 while stop-loss can be placed at $1.95. RafflesMG is suitable for a mid to long term trade.
Neptune Orient Lines
Neptune Orient Lines (NOL) is near its lowest point since 2003. Currently, it still trending downwards. However, the fall has slowed as the price nears the strong support at $1.00. This support has been tested three times for past one year. Will this be the point for the triple bottom reversal? We will not know until it happens. Right now, it is a good point to watch as the downside is limited.
If you wish to enter, you may want to enter on an up day. If the $1.00 support is broken, a stop-loss can be placed at $0.95. NOL is suitable for mid to long term trade.
This analysis is purely based on technical analysis. Do exercise your own judgement before entering any positions.
Article by ART System Founder Andy Yew
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