KHSB’s daily chart

KHSB’s may trade higher if it can stay above its short-term support. The stock was featured late last month and it has responded positively by reaching our target of RM0.73 in the period of about two weeks. It naturally went into consolidation phase after the price spike of 9 Feb. After correcting for about two weeks, the stock appears to have found a bottom above RM0.535. The low of the candle of last Thursday and Friday was right at RM0.535, creating a “Tweezer Bottom” formation. The level also retraced about 50% of the Nov 2011-Feb 2012 rally, which is positive for the continuation of an uptrend. Volume also contracted during the 2-week decline, which is typical of a correction. However, a bottom is only confirmed if the stock closes above the “Tweezer Bottom” high of RM0.59. Positions can be initiated if this happens and a close below RM0.535 can be taken as a stop loss. The price target is the recent intraday high of RM0.80, while a strong move may see a test of the psychological RM1.00. The trade may not work out should the stop loss be triggered and a close below the psychological RM0.50 may spell the end of the rally.