AFTER falling to a one-year low of RM1.53 on Sept 26, last year, Malaysian Resources Corp Bhd (MRCB) attempted to recover but the shares were met with another fresh bout of selling.
Consequently, prices came under pressure to retreat and they re-visited the RM1.53 level again on Dec 17, carving out a “double-bottom” pattern.
Thereafter, this stock turned range-bound on bargain-hunting interest alternating with sporadic liquidation activity, ending down one sen to RM1.57 yesterday. Based on the daily chart, the prevailing trend remains bearish, but MRCB shares appeared to have ebbed in the midst of building up the strength for recovery.
Turning to the indicators, the daily slow-stochastic momentum index was ticking up from the bottom. Its oscillator per cent K climbed over the oscillator per cent D to trigger a buy at the grossly oversold territory on Thursday.
Another short-term measurement, the 14-day relative strength index pulled back from the top to a reading of 39 before curving up slightly to close at the 49 points mark yesterday.
In addition, the daily moving average convergence/divergence histogram resumed the upward expansion against the daily signal line to stay positive. It had issued a buy on Dec 20, last year.
Technically, this stock is likely to be firm in the near term, but prices are likely to face stiff challenges at the 100-day and 200-day simple moving averages.
Initial resistance is expected at the RM1.64 line, followed by the RM1.68 barrier, of which a successful penetration, accompanied by greater volumes would see the fortune of this stock changing for the better. Solid support is kept at RM1.53. An additional floor is pegged at the RM1.48 level.
By K.M.LEE, thestar.com.my
● The comments above do not represent a recommendation to buy or sell.
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