RCE Capital Bhd has been on the slide after an attempt to recover punctured half-way in mid-August, 2009.
In the wake of profit-taking activity, prices came under pressure to retreat from the 50-sen mark to a low of 27 sen in mid-week, the worst since April 2009 on a prolonged correction process before bouncing off slightly on renewed bargain hunting interest.
This stock hit a high of 28.5 sen during intra-day session but finished flat at 27.5 sen yesterday. Based on the daily chart, it looks like RCE Capital has found the ebb after a long bearish phase. If it had not, then it is about to bottom out, given the latest price action and positive signals from the indicators.
Apparently, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the rise, resting at the 66% and 40% respectively. It had issued a short-term buy at the very oversold area on Wednesday. Likewise, the 14-day relative strength index improved sharply over the past couple of days, up from a reading of 23 on Thursday to end at the 63 points level yesterday.
In addition, the daily moving average convergence/divergence histogram climbed over the daily signal line to trigger a buy yesterday.
Technically, prices are poised to advance in the short-term, with initial resistance anticipating at the 33 sen barrier. The next upper hurdle is resting at the 37 sen-38 sen range, of which a successful penetration would see the fortune of this counter turning brighter, enroute to challenge the previous minor rally peak of 50 sen.
As for the downside, stronger support is seen at the 23.5 sen-25 sen band.
By K.M. Lee, thestar.com.my
● The comments above do not represent a recommendation to buy or sell.
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