Stock Of The Week: UNISEM Bhd

UNISEM (M) Bhd rebounded from the most recent lows of 90 sen on June 24 to a high of RM1.06 on July 9 in the wake of renewed bargain hunting interest before turning range-bound on consolidation.

This semiconductor counter finished up one sen to RM1.03 yesterday.

Based on the daily bar chart, prices had penetrated the three-year-old bearish descending line a week ago.

The positive breakthrough suggests that the worst was over and that Unisem may be on the mending course. However, further observation still is needed, as trading volumes remain missing.

If the shares can overcome the relatively strong resistance band of RM1.17-RM1.25 in style, the outlook would be clearer. Upon breaking out, the next target to look for would be the RM1.45 level in the near-term.

Apparently, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the slide. It had triggered a short-term sell at the overbought area earlier of the month.

In stark contrast, the 14-day relative strength index ticked higher from a reading of 66 points in mid-week to settle at the 75 points level yesterday after a mild retracement from the top.

The daily moving average convergence/divergence histogram continued to expand upward, in tandem with the daily signal line to stay bullish. It had issued a buy signal on July 4.

Technically, most of the indicators are looking good, implying Unisem is likely to firm, with a potential of breaking out in the immediate term. So, check out on that.

Current support is seen at the 21-day simple moving average of 97 sen. The lower support is resting at the 90 sen mark. Solid floor is pegged at the 84.5 sen level. 

By K M Lee, thestar.com.my

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