Stock Of The Week : GOLDEN Frontier

GOLDEN Frontier Bhd shares fell to an 18-month lows of RM1.12 on Aug 9 during the recent extended correction process. They turned sideways briefly on consolidation before bouncing off slightly on renewed bargain hunting interest.

This stock hit an intra-day high of RM1.22 in early business but finished at RM1.18, up three sen yesterday as global markets rout prompted jittery investors to book gains quickly.

Based on the daily bar chart, it looks like this counter has found the bottom or stabilised after recent weakness and now they are in the midst of building the platform for recovery.

Investors can consider taking up a position while prices are trading at an attractive level.Otherwise, wait for the confirmation.

Turning to the indicators, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the slide, but the downward pressure appeared to have eased significantly.

The other short-term measurement, namely the 14-day relative strength index painted a much better landscape, inching up from a reading of 13 in mid-week to settle at the 41 points yesterday.

In addition, the daily moving average convergence/divergence histogram had indicated a bullish convergence pictogram, also on the verge of triggering a buy signal.

Analysis suggests Golden Frontier may mend in the short term, with initial resistance expecting at the 50-day simple moving average (SMA) of RM1.24, followed by the 100-day SMA of RM1.31.

A decisive push above the next upper hurdle of RM1.36, which is the 200-day SMA would signal a bullish turnaround. As for the downside, trailing exit is set at the RM1.10 mark. - By K.M. Lee, http://biz.thestar.com.my/

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