AHMAD Zaki Resources Bhd retraced from a near three-year high of RM1.34 on Jan 11 to a low of 80 sen on March 3, undergoing a period of consolidation before bouncing back on renewed bargain-hunting interest, lifting the shares to a high of 93 sen during intra-day session yesterday.
Based on the daily bar chart, the stock appears to have corrected sufficiently and is now in the midst of making an attempt to recover. With prices ignoring the generally frail broad market and trading volumes rising lately, indicating the underlying tone is strengthening, the odds are high that the bulls may succeed.
Elsewhere, the daily slow-stochastic momentum index was firming. The oscillator per cent K climbed over the oscillator per cent D and triggered a short-term buy at the bottom a week ago.
Tracing a similar landscape, the 14-day relative strength index sustained the upward momentum from the oversold area to settle approximately at the 51-point level yesterday.
In addition, the daily moving-average convergence/divergence had indicated a pretty encouraging bullish divergence pictogram and is on the verge of climbing over the daily trigger line. A positive crossing will result in a buy signal.
Technically, the price may firm in the short term, with initial resistance expected at the RM1.08 level. The next upper strong hurdle is seen at the recent peak of RM1.34.
Current support is envisaged at the 79.580 sen band. An additional floor is pegged at the 74 sen level. - By K.M. LEE
● The comments above do not represent a recommendation to buy or sell
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