Stock Of The Week : UNISEM

AFTER finding a shelter at the 3-year lows of 85.5 sen on Dec 6, last year, Unisem (M) Bhd turned sideways, lasting four weeks before bouncing off in the wake of fresh bargain hunting interest.

Riding on the improved strength, prices recovered to a high of RM1.17 on Jan 11, only to be met by another bout of profit-taking activity.Shares retraced back to the 96.5-sen level to trade range-bound, finishing up three sen to RM1.03 on Thursday.

Evidently, the prevailing trend is bearish while prices continue to consolidate but the daily chart clearly shows that Unisem has bottomed out and appears to be making an attempt to mend.

As Unisem was active in the past several weeks indicating growing investors interest the stock is set to carve out a recovery path soon. Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the slide. It had triggered a short-term sell at the 73% level in mid-week.

The daily moving average convergence/divergence histogram also continued to expand negatively against the daily signal line to stay bearish. It had issued a sell on Jan 21. In stark contrast, the 14-day relative strength index had indicated a mild ticking up pictogram from the 42 points level.

Technically, indicators are unclear, implying extended range-bound pattern until a breakout is detected. A successful penetration of the recent high of RM1.17 would signal a bullish reversal, clearing the way for prices to challenge the heavy overhead resistance of RM1.45-RM1.55 band. In the case the 96.5-sen support is violated, a re-test of the 85.5-sen floor can be expected.

By K.M. LEE, thestar.com.my 

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