GUOCOLAND (M) Bhd tested the 200-day simple moving average (SMA) of RM1.11 in mid-March amid correction process before bouncing off in the wake of renewed bargain hunting buying momentum, lifting prices to a six-week high of RM1.43 during intra-day session yesterday.
Based on the daily bar chart, the recent recovery of this counter has been constructive. Going forward, as long as the shares continue to flirt inside the newly-established short-term ascending channel, the prevailing trend is intact.
Elsewhere, the daily slow-stochastic momentum index was on the rise. Its oscillator per cent K reversed up near the neutral zones and climbed over the oscillator per cent D to trigger a short-term buy on Thursday.
In addition, the 14-day relative strength index improved significantly over the past week, firming from a reading of 52 on Monday to settle at approximately 75 points level yesterday.
After issuing a buy on March 21, the daily moving average convergence/divergence histogram continued to expand positively against the daily signal line to retain the bullish note.
Analysis on Guocoland's share price movement over the past several weeks appeared pretty encouraging. Together with the technical indicators painting a positive landscape, they suggest prices are likely to sustain the mending process, targeting a re-test of the previous rally peak of RM1.64 in the near term. If this relatively strong barrier can be taken down convincingly, the next upside objective to look for, would be the RM1.80-RM1.83 band, followed by the RM2-RM2.04 level.
As for the downside, trailing exit is pegged at the RM1.30 mark. - By K.M. LEE
● The comments above do not represent a recommendation to buy or sell.
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