Stock Of The Week : K-ONE Technology Bhd

K-ONE Technology Bhd shares peaked at RM1.73 - a 40-month high reached on Nov 16, 2010. The shares pulled back to a low of RM1.04 on Nov 23, 2010 owing to profit-taking before bouncing back to trade within a moderate band on consolidation.

The stock finished up three sen at RM1.45 yesterday.

Based on the daily bar chart, this stock is making an attempt to resume the climb after a period of correction recently. The daily slow-stochastic momentum index appeared ticking up from the neutral territory. Apparently, the oscillator per cent K had climbed over the oscillator per cent D to trigger a short-term buy in mid-week.

Similarly, the 14-day relative strength index dropped to a reading of 48 on Tuesday amid extended correction before reversing up to settle at the 61 points level yesterday.

Although the daily moving average convergence/divergence histogram remained below the daily trigger line to retain the sell signal, it had indicated a tentative bullish divergence pictogram. Analysis on the technical indicators and price action, K-One shares may firm on renewed bargain hunting interest in the immediate term.

On the upside, a push above the RM1.54 line is likely to propel prices up to challenge the recent high of RM1.73, of which, a decisive penetration will open the window for a probable re-test of the historical peak of RM2.28, reached on Aug 28, 2006.

Important support floor is pegged at the RM1.35 mark, which is the 50-day simple moving average. By K.M. Lee

The comments above do not represent a recommendation to buy or sell.