Based on the daily chart, prices were trapped the past 3-month on consolidation, carving out a rectangular box, seen as base building process. But from the latest price action, it looks like the present consolidation phase may be coming to an end soon and the next probable move would be a new leg of recovery.
Further supporting the fact, the daily slow-stochastic momentum index was seen making an attempt to move out of the bearish territory after triggering a tentative short-term buy at the bottom on Thursday.
On the same day, the daily moving average convergence/divergence histogram climbed over the daily signal to issue a buy call.
In addition, the 14-day relative strength index improved rapidly from a reading of 44 to end the week at the 68 points level.
Technically, indicators are painting an encouraging landscape, thus giving investors a ray of hope that a fresh recovery wave may be in the pipeline.
A successful penetration of the RM1.45 barrier would open the windows for the bulls to re-test the recent peak of RM1.89. Strong challenges can be expected at the RM1.57-RM1.60 bank, followed by the RM1.78 level.
Concrete support is pegged at the RM1.26 line, which is also the trailing stop-loss exit door.
By K.M. Lee, thestar.com.my
● The comments above do not represent a recommendation to buy or sell.
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