PETALING Tin Bhd shares retraced from a five-month peak of 35.5 sen on May 21 to the 200-day simple moving average of 27 sen on June 25 on correction before bouncing off slightly in the wake of renewed bargain hunting activity.
This stock closed 1.5 sen higher at 30 sen yesterday.
Over the past couple of years, it had made several efforts to recover, but each time, the endeavour was met with failure, simply because prices could not attract follow-through buying interest.
Based on the daily bar chart, Petaling Tin appears in the midst of building up the momentum to make another attempt to mend in the short-term and it looks like it may succeed this round, as technical indicators are much stronger apparently.
The oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were firming. It had issued a short-term buy at the oversold area late last month.
Also on the rise, the 14-day relative strength index improved moderately from the neutral zones on Tuesday to settle at the 60 points level yesterday.
Meanwhile, the daily moving average convergence/divergence histogram climbed over the daily signal line to trigger a buy yesterday.
On the back of the encouraging technical reading, Petaling Tin shares are poised to strengthen in the short-term.
If they can overcome the 2½-year-old bearish descending line of 34 sen and charge forward to penetrate the relatively strong overhead barrier of 35.5 sen, the fate of this counter is set to change for the better going forward.
Initial support is pegged at the recent lows of 27 sen. An additional support is resting at the 25.5 sen floor. – By K.M. Lee, thestar.com.my.
The comments above do not represent a recommendation to buy or sell.
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