• btmakingcents

Hammers. Are they really bearish signals? [Propnex SGX: OYY]

I'm a technical trader.

I believe that when you succeed in a trade, there must be a reason for it.

I'ld say that before I make a trade, 75% of the decision lies in technical analysis (systematic trading) whereas the remaining 25% is my "gut feel" (discretionary trading).

Here is the Day chart for OYY,

Credits to Tiger Brokers - THEY ARE THE BEST (Will cover brokerages another time)

I've already explained why I think OYY is a great business in my previous post so we'll focus on the price action indicators for this post.

At the yellow arrows, we see hammers forming. For those who don't what hammers are, please watch Rayners videos on youtube and try not to go googoogaga over him when you're done.

Typically, a hammer is a bearish sign as it shows investor rejecting higher prices. However in this case, lets look a little deeper.

  1. The wick of each hammer is decreasing.

  2. Each time the hammer forms, the support level increases.

How I interpret this is that this stock WANTS TO BREAKOUT

Lets put it this way, the first time OYY wanted to break out, investors came in to collect profits so it went back to status quo. The second time it wanted to break out, investors still came and took profit but this time, buyers were able to accept the higher prices.

For more advanced technical traders, you may also see an ascending triangle forming with resistance at $0.55 and an ascending channel support line.

Question is, could I be right?

And if I'm wrong, how bad will things be? OYY is still a great company.

Dividends are still great, consumers will buy and sell houses and launches are still scheduled all the way through next year.

Lets see how this plays out. We sure do live in exciting times!

11 views0 comments

Recent Posts

See All

© 2023 by btcents.  SGX, Stocks, Investor