Stock Of The Week : Tradewinds Corp Bhd

AFTER a steep rally, lasting two weeks, up from the 76 sen level in mid-March to a high of RM1.02 on March 31, Tradewinds Corp Bhd pulled back to a low of 90 sen on April 19 on correction owing to an apparent profit-taking activity before turning range-bound on consolidation. This counter finished three sen higher to 97 sen yesterday, also the third straight gain in a row.

Based on the daily bar chart, shares remained in consolidation mode for now but price action over the past couple of days, gave a hint this stock may be making a fresh attempt to resume the scaling after the recent breather. Apart from that, the clear positive expansion in the trading volumes further supported the fact that a new leg of upward thrust may be in the making.

Turning to the indicators, the daily slow-stochastic momentum appeared good. After flashing a short-term buy at the neutral area in mid-week, its oscillator per cent K and the oscillator per cent D continued to strenthen, ending approximately at 68% and 48% respectively yesterday.

Also on the rise, the 14-day relative strength index improved significantly from a reading of 43 to settle at the 60 points mark yesterday.

In addition, the daily moving average convergence/divergence histogram had indicated a pretty encouraging bullish divergence pictogram.

Analysis suggests Tradewinds Corporation is likely to attract follow-through interest on the back of promising technical landscape.

Initial resistance is seen at the RM1.02 mark. If prices can overcome this hurdle and charge ahead to tear down the heavy barrier of RM1.12, a new rally to the RM1.20-RM1.30 band can be expected. As for the downside. trailing exit is pegged at the recent lows of 90 sen. By K.M. Lee


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