Versatile’s share price may trade higher after making a short-term bottom yesterday. The stock has been in correction mode since hitting our previous buy target of RM0.58. After 2 months of downward move, a bottom was signaled when it formed the “Tweezer Bottom” at RM0.33 last week that includes a “Bullish Engulfing” candle. The low also found support just above the rising 100-day MAV line. The downmove corrected 50% of the Nov-Jan rally, which is positive for an upward continuation. The highest close in mid-February on a “White” candle should confirm the formation of a bottom. Volume was significantly higher too, suggesting firm buying interest. As such, look for the stock to trade higher and purchases can be made at the current level with as stop loss on close below RM0.33. The price target is the psycholgoicl RM0.50, provided that RM0.40, the 38% retracement of the same rally, is violated. A measured move based on the prior rally could even see it go as high as RM0.80. A close below RM0.33 will nullify the upside bias and look for the stock to continue its correction.
No comments:
Post a Comment