DiGi.COM Bhd has been in correction mode since peaking out at an all-time high of RM5.57 on Oct 19, last year after a massive rally.
In the wake of profit-taking activity, prices retreated to the RM4.51 level. It was soon followed by an attempt to recover, but the effort lost steam, only to be met by a fresh bout of selling pressure and subsequently, they fell deeper into the red, touching an eight-month low of RM4.38 on March 19. Thereafter, fresh bargain hunting interest came to the rescue, leading prices sideways with a mild upward bias.
Based on the daily chart, DiGi.Com appears to have found the bottom and now in the infancy stage of recovery, with prices flirting within a striking distance of the seven-month-old descending line of RM4.82.
A breach of this hurdle, followed by a decisive penetration of the upper 200-day simple moving average of RM4.88 would give investors the confirmation that the counter is on a new leg of uptrend, targeting the RM5.36 resistance and probably, a re-test of the historic high of RM5.57 later.
Apparently, the daily slow-stochastic momentum index was rising. It had issued a short-term buy signal at the bottom on May 21.
Elsewhere, the daily moving average convergence/divergence histogram expanded positively against the daily signal line to stay positive. It had triggered a buy on Thursday.
Meanwhile, the 14-day relative strength index hit a high of 70 on Thursday before weakening slightly to end at the 66 points level. For now, most of the indicators are painting an encouraging landscape, implying a bullish breakout may be on the cards. Pivotal support is pegged at the RM4.58-RM4.60 band, of which a crack may see the base of RM4.38 becoming vulnerable.
● The comments above do not represent a recommendation to buy or sell.
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