Jotech’s share price may climb further after closing above the resistance level yesterday. The stock is actually on a longer term uptrend. It bottomed in early 2009 and has been making higher lows since. The stock spent the whole of last year consolidating the gains of late 2010, but a new leg of rally may have started after the firm close yesterday on a “Long White” candle that emerged above the 3-month resistance level at RM0.145. The breakout looks credible as it was accompanied by a significant volume increase, which indicates strong buying interest. As such, a position can be taken now or if possible, on a pullback towards the stop loss of RM0.115. The price target is RM0.215, a measured move based on the year-long sideways consolidation range, provided that the 2011 high resistance at the RM0.17 level is broken. A trade may not work out should the stop is triggered and a violation of the 10-month support level may put the 3-year uptrend in jeopardy.
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