Bearish (2010-12-01 CNOOC analysis)

It's December everyone. Historic trends show that December is often a good month for the stock market, maybe due to the Christmas and everyone is in a good mood.

However, I could hardly see good signs for boost in stock markets in the coming days, at least in the first few trading days of this Dec. As I posted two days ago, I expected the HSI to keep on dropping to somewhere around 22400-22600.

Today I checked one of the components in Hang Seng Index --- CNOOC 0883.HK.



The stock price has bben rising along the red trendline for few months. Few days ago, the line finally broke. While staying below the line, the price struggled to climb back above, but obviously it failed. It shows that there is a very strong selling force at this level.

MACD and EMA are both moving lower, giving no reverse sign. I would be bearish on CNOOC. It seems like the next support is around 15.6.

But nevertheless, such stock has quite strong correlation with the market index. Once HSI reaches the support zone, we could not short this stock unless the index breaks the zone.