Just at the beginning of March, we saw Sembcorp Marine approaching the KEY 1.10 SUPPORT dangerously…
This level was crucial because we have been holding above this level since 2009,
Yes indeed, more than 10 years back since the Global Financial Crisis…
We were pretty much back to this support that even 2009 crisis managed to hold…
So any move below this level can definitely be meaningful…
Alerts were set as we were awaiting any bearish price actions from here…
It HAPPENED!
On the 28 FEB 2020, sellers seem to be coming out in full force to break the support…
it tried to hold for a few days but it JUST COULD NOT!!
The selling began… Some targets were drawn to the downside with first target at 0.90 as seen below..
This bearish call was more for CFD SHORTS to be taken to ride the downside rather than hold on to long positions all the way down!
To add, there were already some signs of the downtrend taking shape so this bearish price action further confirmed the downwards move… See what I mean.
Over the next few days after the bearish call, indeed, we have seen more selling momentum returning fast and it hit our target at 0.90 in about a week..
Downtrend was intact from the trend indicators..
We have then revised our target lower on further bearish price actions…
To the 0.700 next support as seen below…
Sembcorp Marine was NOW at an ALL TIME LOW…
We have even breached the level seen in 2009 GFC due to a double whammy,
with oil prices collapsing to 18 year low due to a price war between Saudi Arabia and Russia and also due to demand collapsing from the current virus pandemic…
Just not GOOD!
See targets dawn below that were revised even lower, another 20% downside from the 0.900 breakdown…
Things were just not looking good for this stock and many stocks in the oil and gas sector from this double whammy hit! See targets below..
Fast forward to today, we have already seen our 2nd target at 0.700 hit 2 weeks back…
That support at 0.700 has since given way too and we are current trading below it at 0.685..
This support would now become the immediate resistance where any selling can still happen below it...
We may see some consolidation from 0.60 to 0.70 for now as prices start to stabilize and market becomes less bearish due to efforts taken by government around the world to cut interest rates and pushing out economic stimulus package..
BUT THE THING IS, the downtrend may not be over….
It may not be out if the woods yet and if oil prices were to fall further and the current virus pandemic worsen, we may still see more weakness essentially..
Technically, if the 0.600 support breaks down, we can still see it head to 0.500, no one know how low it can go..
Only a firm bullish reversal price action back above 0.70 – 0.80 will invalidate our current bearish scenario…
So be cautious for now…
For those looking to accumulate on dips, I would advise to await signs of reversal before starting to buy cause the worst may not be over and it can still pull lower if supports are broken again…
See where we are below now..
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