MBF Holdings’ daily chart (OSK)

MBF Holdings’ share price may trade higher if it closes above the psychological RM1.00 level. The stock has been consolidating sideways since peaking in late November. The consolidation carries
a positive bias, as it has retraced by about 50% of the late November spike, regarded as a healthy correction of an uptrend based on Fibonacci analysis. The “Long White” candle of Monday also suggests that the stock may find support from the rising 50-day MAV line, like it did in early November. Volume nudged up slightly yesterday, suggesting a return of buying. However, a bottom can only be confirmed on a close above the psychological RM1.00.

Purchase can be made if a successful breakout occurs and the one month low of RM0.94 can be employed as a stop. An aggressive trade may even be to enter now in anticipation of a breakout. A measured move based on the late-November spike could see the price trading as high as RM1.30, although resistance is expected at the 2011-intraday high of RM1.14. The trade may not pan out should the stock close below RM0.94, and a close below the November-low of RM0.76 may spell the end of the rally.