Technical Analysis of Noble Group
Noble Group is another commodity related stock that is listed on the Singapore Stock Exchange. Noble Group share price has been on a decline since Jan 2011.
In our last article on Noble Group back in June 2012, we said that the Noble Group share price is trapped in an Expanding Triangle. We also said that if it breaks to the downside, it would be limited to 0.95 and would rally off that level. The Expanding Triangle did break to the downside but the share price only went as low as 1.02 before rallying by almost 38%.
The Noble Group share price has since dropped back to the 1.00 region and bounced off that level again. This action has formed a huge Contracting Triangle spanning one whole year (from Sep 2011 till Sep 2012). The triangle seems to have been completed end of Sep 2012 with all 5 waves in. This type of horizontal triangle is a continuation pattern which tells us that the Noble Group share price is going to slide further down. How much further down is that going to be? According to the triangle pattern, the price projection is determined by taking the widest part of the triangle and adding (or subtracting in this case) that to the break out point.
By doing this, we arrive at a target of 0.4 for Noble Group share price. This is a deep sell off compared to the current price and so we should take another look at the alternative count. There is a possibility that the triangle is actually wave four of a larger wave. In that case, we can make use of the length of wave 1 to project the target. Using this method, we arrive at 0.95. This is also a likely target and if indeed this level holds, the Noble Group share price is likely to embark on a medium term recovery upwards with a target of 1.7 (50% ) to 1.9(62%).
The Primary count still remains the deep sell off to 0.4. The important level to watch is the 1.00 level which has been providing support for about a year now. If that level breaks and the price drops below 0.9, it is very much likely that it could go all the way down to 0.4 region.