Stock Of The Week: HAP Seng Consolidated Bhd

HAP Seng Consolidated Bhd rebounded from the RM1.87 floor and charged past the RM2 psychological mark to achieve a high of RM2.05 yesterday, the best level since March 2011, in the wake of fresh bargain-hunting interest.

The spike in share price over the past several days suggests that the recent mild correction following a nice rally, has come to an end.

Going forward, this stock is likely to scale, with the sighting of a tentative positive breakout on the daily bar chart. However, trading volumes must expand accordingly to sustain the trend ahead.

Elsewhere, the oscillators per cent K and per cent D of the daily slow-stochastic momentum index were firming. It had triggered a short-term buy signal at the neutral area in mid-week. Mirroring the upward momentum, the 14-day relative strength index improved moderately from the mid-range level on Monday to settle at the 77-point level.

In addition, the daily moving average convergence/divergence histogram climbed above the daily signal line to issue a buy call yesterday.

On the back of pretty encouraging movements in the share price, combined with the positive technical signal, Hap Seng is poised to firm in the immediate term.

Initial target is to challenge the RM2.18-RM2.20 resistance band, of which a clear penetration would clear the way for a re-test of the historic high of RM2.34, established on Jan 10, 2011.

Current support is seen at the 21-day simple moving average of RM1.93. A slip below the RM1.87 line will have a negative impact on the outlook of this counter. By K.M. Lee, biz.thestar.com.my

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