MALAYSIAN Resources Corp Bhd (MRCB) pulled back from a 33-month peak of RM2.28 on Nov 10, 2010 to the 100-day simple moving average (SMA) of RM1.88 in early December amid correction owing to an apparent profit-taking activity following a wave of strong rally.
Thereafter, shares recovered slightly to trade within a moderate range on consolidation and they re-tested the ascending 100-day SMA line once again at the start of the year before bounding off in the wake of fresh buying momentum, driving them to a high of RM2.26 during intra-day session yesterday.
Based on the daily bar chart, it looks like MRCB is making a fresh attempt to resume a rally after a round of correction and consolidation process. Going forward, a convincing breakthrough of the formidable overhead hurdle of RM2.28-RM2.30 band is likely to fuel greater optimism about the trend ahead, thus giving investors the courage to move in aggressively.
Turning to the indicators, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were steady, ending at the 90% and 80% levels respectively yesterday. It flashed a short-term buy on Monday at the neutral zone.
Also on the rise, the 14-day relative strength index improved significantly from a reading of 37 on Monday to close at 79 points yesterday.
Elsewhere, the daily moving average convergence/divergence histogram expanded sharply and positively against the daily signal line to stay bullish. It issues a buy in mid-week.
Technically, indicators remain constructive and with trading volumes building up, they suggest an uptrend continuation may come about soon, targeting the RM3 psychological barrier. The next objective is envisaged at the RM3.50 level, followed by the RM4 mark.
Current support is expected at RM2.17 and the next lower floor is pegged at RM2.10. - By K.M. Lee
# The comments above do not represent a recommendation to buy or sell.
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