Tiger: Higher lows. The stock is on a long-term downtrend since peaking in late 2007. Selling momentum has eased as the trend progressed and the higher lows since the low of Oct 2011 may lead to a change in trend. The buying spike in late 2011 also suggests an accumulation process may be ongoing. The change in trend is not confirmed, as it requires a close above RM0.14, the highest close for November. Thus, a position can be initiated when this happens with a stop loss on close below RM0.10, the low of Dec 2011. A more aggressive trade may choose to enter into a speculative position now, especially with the 4-week high close last Monday, in anticipation of a change in trend. The price target is the psychological RM0.20, just above the high of 2011 and a strong move could even see a test of the 2010-high of RM0.27. Should the stop loss be triggered, the stock is likely to continue its downtrend or at best move sideways.
Compugates: Strong interest. The stock has been on a sideway-consolidation trend since bottoming in mid-2009. It traded between RM0.06-RM0.075 for most part of the period. However, the high interest in the stock since late last year suggests accumulation, which may subsequently lead to a change in trend. In fact, the stock has responded well and now is trading at a 3-year high, with the recent peak higher than the high of late 2011. Therefore, it is expected to trade higher and positions can be initiated above the stop-loss level of RM0.06. A strong move may even see it avoid a close below last week’s low of RM0.08, which also can be employed as an aggressive stop. The obvious resistance is the psychological
RM0.10, which is not too far away but a violation could see it test the 5-year high of RM0.18.
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