Kimlun’s share price may trade higher if it can stay above the short-term support level. After a strong debut which saw the stock doubling in March, it consolidated for some time before succumbing to selling pressure in July. The share price has, nonetheless, rebounded strongly after bottoming in September, regaining 62% of the Apr-Sep decline, and has now spent the last four weeks consolidating the gains. The price is now right above the consolidation low and candles of the past three days, indicating that the price has reacted positively to the support level. The consolidation has also eased the near overbought level, leaving conditions ripe for a continuation of the rally. Purchase can be made on close above the 3-day high of RM1.51, with a stop on close below the consolidation low of RM1.47. The price target is at an all-time high of RM2.00, but it has to first break above the strong resistance of RM1.65, where the 200-day MAV line – which has put a cap on prices twice in the past month. However, a close below RM1.47 will erase the upside bias and look for the price to trade lower. Support is at the gap of RM1.32, retracing exactly 50% of the Sep-Oct rally, and thereafter RM1.14, the high of Aug/Sep 2010.
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