Capitaland

It is interesting to see Capitaland shooting up even though it announced a rights issue.

The technical indicators sure look good at the moment. The MACD made a bullish crossover on 10 Feb 09 on heavy volume. Stochastic indicator also made a bullish crossover. RSI is increasing and is not in overbought/oversold territory.

The stock is approaching resistance at $2.90. This level also coincides with the upper Bollinger Band.

Let’s see if the stock can penetrate the $2.90 level today.

Capitaland

Capitaland had a roller coaster ride this week with the stock going to as high as $3.68 before hitting a low of $2.89 on Friday. The stock managed to close above its low on Friday to end at $2.91.

The stock is now sitting on the 61.8% Fibonacci Retracement level as well as the support level. With the Dow closing near its low of the day on Friday, this support level will be difficult to hold come Monday.

The test will be to see if the break is a false breakdown. If that is the case, the stock should quickly reclaim the $2.90 level. However looking at the big sell down volume, the bears should have the upper hand. The next support line is at $2.66.

In the latest issue of The Edge Magazine, it was mentioned that there were rumors that Capitaland may announce a right issue and the ratio would be at one-for-four, at $2.50 per share. If the rumor turned out to be true, the possibility of the stock retracing all the way to 5 Dec 08 low of $2.43 is very high.