26th was my last update on JKH. That day the price tested the support area of 219, with a small amount of 62 shares. The average daily volume was 241,000 shares, but the last several days before 27th we saw only small volumes changing hands. Also with an inverted hammer then a normal hammer within 3 days confirmed the unclear direction for the stock, yet the short term direction was up, with a support at 219.00 and a resistance at 223.50. On the 27th the stock pushed up very strongly, beating the average daily volume and finishing the day with a total volume of 370,501 shares. The price broke the resistance of 223.50, and closed at 225.20, after reaching a high of 225.50. This is a very bullish development for the stock, if continued, the next resistance is the psychological figure of 230, and a Fibonacci 23.6% figure of 226.70, based on the high of 21st May 2013, to the low of 10th September 2013. The range was a high of 299.80 and a low of 204.10. The resistance of 226.70, could be broken in a matter of minutes, as it is only an upside of .67%, as such the most interesting barrier will be 230.00. If this is gonna be broken, convincingly then the next to test will be the Fib 38.2% of 240.50 or thereabouts. From the present 225.20 to 230.00, the price has to increase 2.13%, and up to 240.00 it is an increase of 6.57%.
But for this to move like this in the short term, there must obviously be some solid fundamentals, which must be closely monitored. As of now the only positive sentiment is the low interest rates. The next is the Cabinet approval for the Water Front Project to go forward uninterrupted.
Also how the RSI is gonna behave when the price turns bullish. If the RSI hits over the over bought area, when the stock moves to 230.00, and beyond, then exit strategies must be worked out.
Another important point to ponder
Before the stock hammered upto 299.80 on the 21st May 2013, the stock rallied for 46 Days. Then for 13 days it had come down to 202.10, before it has made a long rally till 21 May 2013. A period of 110 days. But this was prior to the Rights issue, and that was a major event.
What is the strategy
It's very simple just follow the trend, with strong stop loss options.
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