BUMI Has Met A Very Strong Resistant

What happened with BUMI ?. Since mid January 2010, after it reached 3,000 on January 11, 2010, the price of BUMI fell to 2,150 and it hasn’t returned to 3,000 yet. BUMI has moved sideways in low price for almost 5 months.

BUMI has been going into several problems in recent several months. Tax problem and increase of corporate’s debt are the major bad news for BUMI. There are many rumours about BUMI, too. After the resignation of Indonesia Secretary of the Treasury, some people and analists said that BUMI would get a good wind to increase.

On May 10, 2010, BUMI was opened at 2,325. Then its price was up to 2,500 and it was closed at 2,475. Its volume of transaction was 943,465 lots. It was a significant increase of its volume transaction.

Last Tuesday, May 11, 2010, I was in a chatting room. BUMI was opened at 2,475 and then raised to 2,525 quickly. It seemed that its demand was strong and its buyers were very aggresive. Then a trader in the chatting room wrote that if BUMI broke out 2,550, it would continue uptrend. I didn’t agree with his opinion. I said that 2,550 was a critical point. BUMI would be difficult to reach 2,550. There is only a little chance for it. He continued with his opinion that if BUMI reached 2,575, it would continued to 3,000. His recommendation is “buy”. Then I told him again, that it’s almost impossible for BUMI reaching 2,575 this time. BUMI won’t break out 2,550.

After reaching 2,525, BUMI went down to 2,400 and it was closed at 2,425 last Tuesday. Its volume of transaction was 701,397 lots.

Last Wednesday, there was a comment from an analist in inilah.com that BUMI had a chance to 2,550 as a resistant level and 2,350 as a support level on that day. He recommended trading buy for BUMI and waited Q1 financial report of BUMI 2010 that would be released next week. A review of research from Samuel Sekuritas recommended buy because a subsidiary business of BUMI would make an IPO in Q3 2010, according to inilah.com. BUMI was opened at 2,475, down to 2,425, and it was closed at 2,500 last Wednesday. Its volume of transaction was 277,088 lots.

It’s been 3 trading days after our chats and BUMI still can not touch 2,550. It reached 2,525 and it was closed at 2,500 again last Friday. BUMI was up 8.7 % in a week. Will BUMI break out 2,550 and continue uptrend next Monday ?. No, I don’t think it will be, because BUMI has met a very strong resistant. BUMI will start to downturn next Monday. I predict that its volume of transaction will be about 150,000 to 300,000 lots. Do you see it in BUMI’s chart below, too ?.