RENEWED bargain-hunting interest lifted Gadang Holdings Bhd to a four-month high of 62 sen during intra-day session before the gains were trimmed slightly, and it settled at 61 sen, up 3.5 sen yesterday.
The spike came after a long bearish phase, followed by a brief consolidation above the recent ebb of 52.5 sen since mid-May, which had been interpreted as a base-building process. Based on the daily bar chart, there is a significant expansion in trading volumes. This implies some degree of interest is returning, thus giving investors a ray of hope that prices may be on a recovery path.
A decisive push above the 65.5-sen barrier would confirm a bullish return. If successful, we are likely to see buyers turning more aggressive, betting on more advances going forward. The next objective is to challenge the significant resistance, resting at the 80-sen mark.
The daily slow-stochastic momentum index had been firming, issuing a short-term buy at the very oversold area in mid-week. Mirroring the upward thrust, the 14-day relative strength index improved sharply from a reading of 42 on Tuesday to settle at 71 points yesterday.
Meanwhile, the daily moving average convergence/divergence histogram climbed sharply against the daily signal line after triggering a buy on Thursday. Indicators are painting an encouraging landscape, suggesting Gadang is likely to strengthen in the short term.
Initial support is anticipated at the 58-sen line, followed by the 54.5 sen floor. The recent bottom of 52.5 sen would act as a base for recovery. By K.M. Lee
The comments above do not represent a recommendation to buy or sell.
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