A FUTILE attempt to recover due to lack of follow-through interest, dragged the shares of Lion Industries Corp Bhd (Lion Inds) down from the RM1.10 level on April 9 to a low of 96.5 sen on April 16, in a week-long correction process.
Thereafter, prices fluctuated within a narrow range on consolidation before bouncing off in the wake of fresh bargain hunting activity.
Lion Inds shares hit an intra-day high of RM1.05, but finished up one sen at 99 sen yesterday. Based on the daily chart, this stock is making another effort to mend and with trading volumes building up, the odds are great that it may make it this round.
A push above the 27-month-old bearish decending line, resting at RM1.08, followed by a decisive penetration of the recent high of RM1.10 would signal a positive reversal.
Elsewhere, the daily slow-stochastic momentum index was firming. Its oscillator per cent K climbed over the oscillator per cent D to trigger a short-term buy at the neutral area yesterday.
Likewise, the 14-day relative strength index improved moderately from a reading of 46 on Tuesday to settle at the 65 points level yesterday.
Another buy signal was sighted yesterday, with the daily moving average convergence/divergence histogram crossing above the daily signal line.
Technically, indicators are pretty encouraging, implying a bullish breakout may be on the cards.
If that comes about, the immediate target would be to challenge the RM1.30 hurdle. Heavy resistance is expected at the RM1.45 barrier.
Immediate support is pegged at the 50-day simple moving average of 94 sen. The lower floor of 89 sen would act as a trailing stop-loss exit level.
- By K.M. Lee, thestar.com.my
● The comments above do not represent a recommendation to buy or sell.
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