Singapore Airlines (SIA) – When are you going to take a rest?

Almost all the analyst reports recommend a SELL rating on SIA but the stock price defied the odd and move upwards for the past few months. The stock price is irrational and I don’t see why SIA stock can keep moving up amid the recession. In addition, the general economy is bad. The passenger traffic drop YOY, cargo traffic and cargo capacity is also falling YOY, the SIA staffs was asked to take unpaid leave, the company is losing money for the first time, but the stock price is UP and UP!

I still believe that SIA will come down at certain point because there is no fundamental to support the continuous uptrend for this blue chip stock.  Looking at the bigger picture, SIA has been on a nice up trend since April, however there is a price volume divergence when the stock price goes higher and higher. The key question is when SIA will start the correction?

Today SIA closed the day with a long black candle. Base on the past few months SIA stock price behaviors, the stock price will probably retrace back to 20D MA when there is long black candle or bearish marubozu candle formed. Can SIA bounce back from the 20D MA and continue its up trend or SIA breaks down the 20D support line to start a bigger correction? We will wait and see. But one thing for sure, it is not the right time to buy because this price ($14) is definitely not at a low price.

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