KNM Group Bhd has been in the doldrums for quite some time due to lack of support from investors, which witnessed the shares dropping to a low of 44 sen on Dec 4 last year, the worst level since Nov 26, 2004.
Thereafter, prices turned sideways briefly on consolidation before inching up in the wake of light bargain-hunting interest.
This stock finished at 51 sen, up one sen yesterday.
Obviously, the prevailing trend is bearish but based on the daily chart, it appears KNM Group has ebbed or is in the midst of carving a “rounded bottom” recovery pattern.
Apparently, the daily slow-stochastic momentum index was on the slide. Its oscillator per cent K tripped below the oscillator per cent D at the top to trigger a short-term sell on Thursday.
In stark contrast, the 14-day relative strength index pulled back from the overbought territory to a reading of 61 on Thursday before ticking up slightly to end at the 65 points level yesterday.
Meanwhile, the daily moving average convergence/divergence histogram continued to firm, in tandem with the daily signal line to retain the positive note. It had issued a buy on Dec 6.
Technically, most of the indicators are painting a pretty encouraging landscape, implying prices are likely to strengthen in the short-term.
Initial resistance is anticipated at the 100-day simple moving average (SMA), resting at the 57-sen level.
The next upper strong hurdle is expected at the 200-day SMA of 66 sen, of which a decisive penetration would see the fate of this counter turning brighter.
As for the downside, trailing exit is pegged at the recent lows of 44 sen.
By K.M. Lee, thestar.com.my
The comments above do not represent a recommendation to buy or sell.
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