Shares of Singapore-listed Thai Beverage tumbled more than 5% in trading on 15th August, after the beer brewer reported a 2% drop in second quarter net profit. But the bull run was long over in May 2013 as shortists entered the room.
We apply Ichimoku Analysis on the daily chart below:
Chart from Bloomberg
After a strong run up from January to April, we saw prices dip into the Kumo support for the first time, but were well cushioned by the thick cloud. Prices then bounced up into May, followed by a bearish Tenkan Sen (greenline)/ Kijun Sen (red line) cross, before heading towards the Kumo once again in June this year.
Note in the red circle how thin the Kumo support was, and probability of a Kumo break is inversely proportional to the thickness of the Kumo. In early June we see the successful Kumo break to the downside, circled in Red.
With prices below the Kumo, the Kumo will serve as resistance. We see prices testing this resistance in July, but failed to pierce upwards. The bears clearly dominated once Chikou Span (black lagging line) also broke the Kumo support.
The thick cloud behind prices are called Kumo shadows, and the flat portions of the Kumo shadow serve as target prices. With bears running past the yellow target, they will be heading towards the orange line at about 42 cents.
Any hope for the bulls?
As the movement downward was fast and furious, we should see prices consolidating soon. This happens when the red Kijun Sen line turns into a horizontal line, representing the 26 period equilibrium. Right now however, it is pointing down, but it should flatten once the market begins to consolidate, and draws prices up to the Kijun Sen line.