EONMETALL Group Bhd shares hit a nine-month high of 51.5 sen amid follow-through buying momentum in early trading before reversing to settle at 48 sen, down 1.5 sen in the wake of profit-taking selling yesterday.
Based on the daily bar chart, the sudden spike in the share price only came about four days ago, after a series of base building process at the 40-sen mark, lasting several months and following a positive breakout of the existing rectangular formation on Tuesday.
From the latest price action and development, it looks like this stock has bottomed out and now in the early stages of recovery.
Elsewhere, the daily slow-stochastic momentum index retained the buy mode, with the oscillator per cent K maintaining the posture above the oscillator per cent D at the bullish territory.
Similarly, the 14-day relative strength index extended the upward thrust to close at the 91 points yesterday. A reading above 80 indicated overbought condition.
Meanwhile, the daily moving average convergence/divergence histogram expanded sharply against the daily signal line to stay bullish. It flashed a buy on Monday.
Technically, the door is wide open for more scaling following the recent breakout. Hence, any pullback in the immediate term due to overbought reason is viewed as an opportunity for investors to accumulate.
Current resistance is anticipated at the 60 sen-63 sen range. A push above this hurdle may propel prices up to the 70-sen level or the 80-sen mark in the near term.
Initial support is envisaged at the 45-sen line. - By K.M. LEE
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