VERSATILE Creative Bhd has been on the mending course since early March after bottoming out at the 19 sen level.
But, it was no smooth sailing, as prices hit the “speed bump” shortly and subsequently they turned sideways to lower on correction, lasting more than a month.
However, just when Versatile appeared weak and in danger of retreating back to the base, the bulls struck back with a vengeance, driving the shares to a high of 46 sen during intra-day session on Thursday, the best level since March 12, last year.
Based on the daily chart, this counter may be carving out the Elliott basic five-wave sequence pattern. If so, investors can expect more climbing in the immediate term, followed by a mild corrective phase before resuming the rally to the next upper level later.
Elsewhere, the oscillator per cent K had slipped below the oscillator per cent D of the daily slow-stochastic momentum index to trigger a short-term sell at the overbought area, but it could not be confirmed for now, as they were keeping the posture above the 80% bullish line. In stark contrast, the 14-day relative strength index continued to advance deeper into the bullish territory.
The daily moving average convergence/divergence histogram extended the steady upward momentum, in tandem with the daily trigger line to stay bullish. It had issued a buy on March 15.
Technically, most of the indicators are positive, implying Versatile may climb on bullish extended-mode. A breach of the 47.5 sen barrier is likely to open the windows for the bulls to re-test the previous rally peak of 58 sen, set on Jan 18, last year. Current support is resting at the 40 sen mark and important floor is pegged at the 14-day simple moving average of 35 sen. - By K.M. Lee
● The comments above do not represent a recommendation to buy or sell.
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