19 JULY 2013
First Resources: A Short Term Opportunity To Short?
By Robin Han
First Resources (FirstRes) was in a strong downtrend for the past two months but it managed to rebound recently. However, from the weekly chart, we can see that the share is still in a clear downtrend.
Besides, we can see that the resistant trendline is quite significant. In addition, after a rebound from 1.65 to 1.735 over the past three days, the stock is currently quite overbought and has a short term risk now.
A stock usually does not change from downtrend to uptrend suddenly. One may consider shorting on strength during rebound as we can expect the stock to have a pull back thereafter. FirstRes released its quarterly report on 14 May, therefore it is not likely to release another financial report before August that would bring sudden uncertainty to the technical chart pattern.
Do take note that this trade is for the short term. The stock may turn uptrend after the pull back we are planning to trade.
Publish date: 19/07/13