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Gauging The Trends
 
Singapore

SembMarine
 

The Stochastic is a momentum oscillator that will help traders to better time the turning point in the stock market through the usage of two important components. They are the overbought/oversold levels and crossover signals. 

To detect an imminent up-move for a stock after a significant decline, it is best to see a bullish crossover signal at the oversold level. Oversold level is defined as a region below the 20% level of the Stochastic oscillator and a bullish crossover is detected when the %D (blue line) crosses up above the smoothed %D (red line) from below. 

As seen from the chart of SembMarine, it had a rally of 8% to hit a high of $5.47 on 3rd January 2011 after such signal was detected on 21st December 2010. Interestingly, the Stochastic oscillator has flashed a possible bullish crossover signal at the oversold region recently on 11th January 2011. SembMarine may see an upmove to test the immediate resistance at 5.47 and above it opens up scope for a further rally towards 5.70 next. However a violation below the immediate support at $5.12 may dampen the bullish sentiment to see a correction towards the next support at $4.92.


 
 
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