Since the news of Singapore entered technical recession and private property prices fell, Capitaland share price has fallen from around the $3.30 level to an intra-day low of $2.37 on 21st Nov 08. Currently, the price is trading at a narrow range between $2.40 to $2.50 and from the various indicators, it appears to be start forming a base perhaps for the year end rally. Stochastic has just entered the 20% level and looks to be flattish. RSI remained almost flattish at the 40% level for past days. MACD signals also totally flat. DI pair though negatively spaced but as the ADX signal fell to below 20 level suggesting the stock price is performing directionless movement, ie merely moving in a range bound condition. All these conditions fit just nice for a base building or bottoming formation at around the $2.40 level. If there is a year end rally and Capitaland is one of the blue chips that involves in the rally, potentially it can rally to re-test the $3.30 level. Downside for the moment remained at the $2.28 intra-day low achieved on 28th Oct 08. Hence, the risk to rewards ratio is pretty impressive if it does move up in the year end rally. Investors/traders with confident that Capitaland will rally in the year end rally ( if there is one ) could strategically open a long position at the $2.40 level and if between now till the year end rally, there is a capitulation, complete the collection then wait for the year end rally.
