Wilmar

Commentary:

Wilmar has been trading under its intermediate downtrend line since May. This intermediate trendline was violated once on 10 Nov. Similarly the double bottom formation since early Oct was violated once as well on the same date on a closing basic. Subsequently, price has not been able to attain a higher high for the past 2 trading days and were still trading under the intermediate trendline and double bottom breakout point level. The price action on 10 Nov therefore points to a false break and hint of more downside pressure in the coming days.

Strategy:

Aggressive traders can either choose to short nearer to the resistance level of $2.75 or wait for a break below the short-term uptrend support line before initiaing short position. Having said that, in the unlikely event Wilmar is able to break above $2.75 on a closing basis for more than 2 consecutive days. It will therefore signal both an intermediate trendline break and confirmation of double bottom formation. This will inadvertedly signal a change in medium term trend from bearish to neutral. Traders should than consider initiating long position once that happen with price likely to test the prior high of $2.91 and subsequently the all important $3 mark.