However, just when prices were seen building a concrete platform for recovery, an unexpected negative development in the eurozone returned to disturb investors, triggering a fresh bout of liquidation pressure.
As a result, the solid floor cracked and consequently the conglomerate took a beating like other quality issues, falling to a low of RM9.22 during intra-day session yesterday, the worst level since January.Apparently, prices had slipped below the 100-day simple moving average (SMA) in mid-week, the first time in six months. Following the breakdown, they now are supported by the 200-day SMA, resting at the RM9.15 level. In the absence of any evidence of panic selling, the 200-day SMA is viewed an attractive level for bargain-hunting nibbling for now, if prices weaken further over the next couple of days.
Technically, the daily moving average convergence/divergence histogram expanded sharply and negatively against the daily signal line to retain the bearish note. It had issued a sell on April 19. Despite that, this blue-chip counter may stage a relief rebound soon, given the single-digit reading on the daily slow-stochastic momentum index and the 14-day relative strength index, suggesting extremely oversold condition.
Significant resistance is anticipated at the RM9.60-RM9.63 band. The next upper hurdle is expected at the RM9.80 mark. If the RM9.15 line is taken out, look for the RM9 psychological level as the lower support. - By K.M. Lee
● The comments above do not represent a recommendation to buy or sell
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