Ezra

For the risk taking fellows, 1.71 is the price one can consider to go long, but on half position. Ezra is trading below the 2 MA, meaning that it is still weak. Any positions taken here will be meant for a longer time frame.
I am not too impressed with Ezra's performance lately, given that the commodities have been rallying and Ezion has put up a better performance. The breakout point at 1.81 was barely breached before a reversal downward. The focus seems to be still on agricultural commodities, with Golden agri and Noble taking the lead. I will be making more posts next week once i have more time. For now the market sentiment seem to be poised towards a bullish stance, after all the 'washout' has occurred.

Stock Pick


Market sentiment-
Been scanning around some trading blogs and i realised that the sentiment is still cautiously bullish. We have more space to go. I have been looking out for commodity counters as they are obvious targets for a leg up in this climate of weakening USD. Crude oil in comparison has not rallied much. Ezra is under the radar now because of a recent rights issue. Most oil counters in fact have not been in the limelight recently, with the attention focused on agricultural commodity counters like wilmar and golden agri.

Ezra Technical analysis-
This stock has been trending down in a multi month channel and has been underperforming the market. Traditionally, Ezra and Ezion has a high correlation due to its similar nature of business.
Putting the 2 stock side by side, it is clear that ezion has broke out once from the 1st downtrend channel and is attempting the 2nd resistance. Is this a hint that Ezra will breakout soon also?

Ezra's low in april is likely to be there for a while, since the 1.65 support has been tested 3 times and the stock is currently trading above right now. Some stability is forming with the new short term uptrend channel forming and notice how it converges into the downtrend resistance. The last time Ezra fell below the moving averages, the dip was swift and deep. Notice how the recent price deep has been formed; again signs of support.

The market has priced in the rights issue by now and Crude oil will probably be trading above 90s in time to come. The quantitative easing is supposed to bring in some inflationary pressures to the US to offset a deflationary economy. The trickle down effect point towards increased demand for crude oil, and the posture of a weak USD will reinforce a upward trend for commodities in general.

Strategy-
The 1.74-1.78 region is a good load up area. Look to add more above 1.81, this is the breakout point. Cutloss at 1.69, target 2.00.