Cosco's rise is incredulous. From 1st Apr, it rose from $1.24 and closed at $1.51 last friday (9th Apr) This means share price rose by 21% in 1 week+? This sort of rises are common for penny stocks but for a mid cap stock? That's one hell of a run up. Of course I can start hearing people justifying cosco was once an $8 dollar stock in 2007 (STI was at 3400 points?), hence at $1.51 (STI is now 2971?), its severely undervalued. I wont go into fundamental analysis on this counter since I'm not trained in FA, but personally the prices we saw in 2007 were just artificially inflated during the boom years and is a poor comparison to be used.
What's really interesting lies in the chart. I see a bump & run pattern and thats bearish. I also predict a harami (
red horizontal red oval) of some sort tomorrow (12th Apr) and if this plays out then it will confirm the decline? Notice the gap, this
could be filled. Other simple supporting factors include:
- Overbought
- Stochastics at 80% mark
If cosco is an uptrending stock, then it will correct, touch the
fibonacci support line (38.2%) around the $1.40 mark and rebound. Alternatively, it could also correct further, close the gap before rebounding up to resume the uptrend, invalidating the bump & run pattern.
Either way, cosco looks
poised to decline. If cosco opens on a positive note tomorrow, it is an excellent opportunity to open shorts on this counter. Caveat Emptor
Edited: Fibo should be 38.2 and not 36.2
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