Welcome to the sixth episode of the EquiTalks. For those of you who have missed the first five episodes, do not worry because they are all available on our website.
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For today, I would like to talk about Greenergy Holdings, Inc. (GREEN).
We do not see any dividend announcement for GREEN.
Greenergy Holdings Chart
On March 12, 2019, GREEN closed at 2.65 per share. The major resistance that I plotted in my chart is at 3.50. The major support is near 1.90.
Now, there are midterm support and midterm resistance between those levels. The midterm support is at 2.34; the midterm resistance I put at 2.90.
GREEN broke below the midterm support at 2.90. It’s now on its way on retesting another midterm support at 2.34.
Today’s green candlestick came with a bearish volume, which is actually above the 10-day volume average. Though, it does not look that heavy when you see the height of the bars on the volume histogram.
You will also notice that this is the daily volume trend of GREEN for the past two to three weeks.
How do I translate this? This green candlestick, which came with a volume bar that’s above its 10-day volume average, tells me that we might continue to see a descent in price.
MACD has been tracking the bearish territory since the third week of February. My bearish translation to the correlation between the price and the volume is also being supported by the bearish sentiment coming from the MACD.
For the risk level of Greenergy Holdings with its volatility score of 68%, GREEN already has a moderate-risk level.
Net Foreign Status
If you would like to know the net foreign trade for the 2019 year to date, GREEN is on a net foreign selling mode. FYI, the stock is already trading inside the confirmed bearish territory. This is because its price is already moving below the 50-day SMA.
Watch out for the midterm support because if this descent in price is being supported by a volume above its 10-day volume average, then it’s more likely for the price to touch near 2.34 again.
If and when it hits 2.34 and volume is still above the 10-day volume average, I would suggest that you stay in the sidelines for the time being and be on a wait-and-see mode. Try to monitor if it will touch the major support near 1.90.
It does not mean that it isn’t an automatic buying signal if and when a stock hits a certain support level. You will have to recheck and reevaluate if you still see some strong demand to sell the stock down.
If there’s still downward pressure, then that means you don’t have to rush into the idea of entering a new position right away.
Volume Review for GREEN
Take note; GREEN closed today at 2.65 apiece. The price point that got the biggest volume and the highest number of trades is also at 2.65. It got 27% of today’s volume.
Observe that 2.65 is not only the closing price but also the intraday low. Because the price that got the biggest volume and the highest number of trades is also the intraday low, then that’s another point for the bears.
I’ve seen nothing but bearish signals on the chart. It now compels me to make a recommendation not to rush into entering a new position on GREEN. Not just yet, so don’t hurry.
Monitor the price at 2.34. If you still see a robust bearish volume being registered even when the price already hits 2.34, maintain your position in a wait and see mode. It is more likely for the price to break down below 2.34 and revisit 1.90.
If the price bounces away once it inches closer to 2.34 and comes with a bullish volume, you may then consider doing a test buy.
Don’t Buy At Any Price
Of course, you don’t buy at any price. We don’t use the word “any” when it comes to buying or selling. We identify the price points and if possible, the price ranges that got the biggest volume and the highest number of trades. That’s how we do it at Equilyst Analytics.
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I am Jaycee De Guzman, founder and Chief Executive Officer of Equilyst Analytics, Inc. My mission is to simplify stock trading and investing in the Philippine Stock Exchange using my proprietary evergreen strategy in stock trading and investing. My vision is to level up at least 1,000,000 Filipino stock traders and investors by 2030. I will make it happen.