We take a look at Genting Bhd, a market outperformer for the past two years. Despite the weakness in 2011, the stock’s longer term uptrend is still intact. In fact, it may have just made an intermediate term low at the 2007 high. A new up-leg should see the share price trading above RM12.00.
Genting is on a long-term uptrend, as shown by the higher lows it has been making since 2009. In fact, the stock is one of the market outperformers during the market rally up to July this year, as can be seen from the rising relative strength line. Despite the weakness in 2011, its recent low is still well above the 2010 low. In fact, Genting has been leading the benchmark. The share price broke above the 2007 high in 2010 but failed to make a new high in July this year.
Therefore, the stock’s current trend is expected to continue. The recent low in September could possibly be an intermediate term support as the weekly RSI was the most oversold in two years. It also found support at the broken resistance of RM8.75, which was the high of 2007. The stock closed below this level for a week only to rebound the following week, in what signifies a false breakdown. The “Long Black” candle of 23 Sept, which failed to induce further selling, is also a confluence of Fibonacci retracements, retracing by 38% of 2009-2011 rally and 50% of the 2010-2011 rally.
The formation of the bottom was finally confirmed last week when the share price closed above the high of the “Long Black” candle at RM9.57. It is expected to trade higher with resistance expected at the Fibonacci retracement levels of the Jan-Sep decline at RM10.50 and RM11.00. A break above RM12.00 will confirm the continuation of the longer term trend, with a price target of RM14.00. However, should RM8.75 be broken for the second time, the longer term trend will likely turn weak, with supports expected at RM7.50, the high of 2009, and RM6.50, which is the low of May 2010.
Genting is on a long-term uptrend, as shown by the higher lows it has been making since 2009. In fact, the stock is one of the market outperformers during the market rally up to July this year, as can be seen from the rising relative strength line. Despite the weakness in 2011, its recent low is still well above the 2010 low. In fact, Genting has been leading the benchmark. The share price broke above the 2007 high in 2010 but failed to make a new high in July this year.
Therefore, the stock’s current trend is expected to continue. The recent low in September could possibly be an intermediate term support as the weekly RSI was the most oversold in two years. It also found support at the broken resistance of RM8.75, which was the high of 2007. The stock closed below this level for a week only to rebound the following week, in what signifies a false breakdown. The “Long Black” candle of 23 Sept, which failed to induce further selling, is also a confluence of Fibonacci retracements, retracing by 38% of 2009-2011 rally and 50% of the 2010-2011 rally.
The formation of the bottom was finally confirmed last week when the share price closed above the high of the “Long Black” candle at RM9.57. It is expected to trade higher with resistance expected at the Fibonacci retracement levels of the Jan-Sep decline at RM10.50 and RM11.00. A break above RM12.00 will confirm the continuation of the longer term trend, with a price target of RM14.00. However, should RM8.75 be broken for the second time, the longer term trend will likely turn weak, with supports expected at RM7.50, the high of 2009, and RM6.50, which is the low of May 2010.
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