SILK Holdings Bhd recovered from the recent low of 20.5 sen on Sept 26 last year to achieve a high of 33.5 sen during intra-day session yesterday, the best in nine months on renewed bargain-hunting interest after a period of correction.
Based on the daily bar chart, the stock penetrated all the moving averages on our radar screen but they fell short of giving us the confirmation that the fate of this counter has indeed turned around.
Hence, all eyes are now focused on the bearish descending line, resting at the 33.5 sen mark, which was yesterday's peak. A decisive breach of the stiff barrier would signal a bullish reversal, which is likely to spark aggressive buying momentum going forward.
Elsewhere, the oscillator percent K had fallen below the oscillator percent D of the daily slow-stochastic momentum index to trigger a sell at the top on Thursday, but it could not be confirmed as both the oscillators were still flirting above the 80% bullish line.
In stark contrast, the daily moving average convergence/divergence histogram sustained the upward expansion against the daily trigger line to retain a bullish note.
Meanwhile, the 14-day relative strength index extended the upward thrust from the mid-range to end at 87 points yesterday.
Technically, indicators are painting an encouraging pictogram, implying a positive breakout is imminent. If successful, investors are likely to see Silk mounting a challenge on the upper resistance of 39 sen. The next overhead resistance is resting at the 46.5 sen level.
Initial support is envisaged at 30 sen. An additional floor is pegged at 28.5 sen. - By K.M. Lee
● The comments above do not represent a recommendation to buy or sell.
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