Stock Of The Week : Ornapaper Bhd

AFTER pulling back from the five-year peak of 77 sen on Oct 25 to a low of 53 sen on Nov 28 on correction, investors emerged from the sidelines to indulge in bargain hunting activity, helping Ornapaper Bhd shares to recoup to a high of 68 sen in mid-December, last year.

Thereafter, they turned range-bound, undergoing consolidation, which saw prices ending up three sen to 67 sen yesterday.

Based on the daily chart, it appears the bulls are making a fresh attempt to resume the scaling after taking a short breather recently. A push above the 68 sen line would lead to a re-test of the 77 sen stiff barrier, of which a decisive breach would give investors the confirmation of a promising trend ahead.

If successful, target the 90 sen mark. A major breakout of the next upper strong hurdle of 98 sen - RM1 band would see the bulls becoming more aggressive.

Elsewhere, the oscillator per cent K reversed up from the mid-range and climbed over the oscillator per cent D of the daily slow-stochastic momentum index to trigger a short-term buy yesterday.

Meanwhile, the 14-day relative strength index improved sharply over the past couple of days, up from a reading of 49 on Wednesday to close at the 69 points level yesterday. In addition, the daily moving average convergence/divergence histogram had recommence the upward expansion against the daily signal line to stay bullish. It had issued a buy call on Dec 11, last year.

Technically, indicators are positive. Combined with growing trading volumes, Ornapaper shares are poised to firm in the intermediate term

Crucial support floor is pegged at the 60 sen mark.

By K.M. LEE, thestar.com.my

The comments above do not represent a recommendation to buy or sell.