After peaking out temporarily at a high of 85.5 sen on Nov 12 last year, also the best level since April 2011, Formis Resources Bhd retreated on apparent profit-taking activity.
The wake of selling slashed prices to a low of 71 sen on Dec 23 last year.
Thereafter, they turned sideways briefly on consolidation before bounding off amid fresh bargain-hunting buying interest, pushing the shares to a high of 78 sen during intra-day session yesterday.
Based on the daily chart, Formis had penetrated the short-term bearish descending line, implying that the recent
correction phase has ended.
Theoretically, prices are expected to firm on a new upward wave but further observation is needed, simply because turnover has yet to catch up.
The immediate upside objective would be to challenge the recent high of 85.5 sen, of which a decisive penetration would give investors the confirmation of an uptrend continuation, en route to the RM1-RM1.06 band.
Stronger resistance is anticipated at the RM1.25 barrier.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were rising. It had issued a short-term buy at the mid-range on Tuesday.
Likewise, the 14-day relative strength index improved significantly from the bottom in late December last year to settle at the 66-point level yesterday.
Meanwhile, the daily moving average convergence/divergence histogram continued to expand steadily against the daily signal line to stay bullish. It had indicated a buy on Monday.
Technically, indicators are looking pretty good, suggesting a steadier trend ahead.
On the downside, current support is pegged at the 14-day simple moving average of 73.5 sen.
Important floor is set at the 70 sen mark.
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