Kencana’s share price continued to slide and a close below the RM2.60 support level could see the share trading lower. Since the early August sell-off, the stock has moved sideways within the RM2.60 and RM2.80 range. Its failure to close above RM2.80 shows that the share price has yet to erase the bearish sentiment shown by the still-uncovered gap down of early August. The stock’s movement in the past month is also weak, based on the daily RSI, as it stayed below a prior support level. The share price has since traded lower and is now testing the support level of RM2.60. In fact, yesterday’s close was the lowest since May low. Thus, selling may intensify should the share price close below support today, which may also see it breaking below the 200-day MAV line. Liquidation can be effected on a break below. An area of support is expected at the recent low of RM2.50 and RM2.40, the Feb low and also a 38% retracement of May 2010 – July 2011 rally. If broken, support is expected at the RM2.10 area, the 50% retracement level, and the psychological RM2.00. However, a close above RM2.70 could see buying returning as it erased the bearish bias of yesterday’s “Long Black” candle. Resistance lies at RM2.80, RM2.90 and RM3.00.
(Chart extracted from ChartNexus)
No comments:
Post a Comment