RGB’s share price may climb after closing at the highest in 9 months. The stock has been on a longer term downtrend after peaking in late 2007. However, this trend may change – at least in the short term – after the stock closed at the highest level in nine months, marginally above the November-high of RM0.09. The firm close last Friday reduced the possibility of a false breakout. The stock has been closing above its 200-day MAV line for more than 3 weeks now, which is a sign of strength. The breakout last Friday occurred on high volume, suggesting firm buying interest. Thus, a purchase can be made at the current level, or on a pull-back towards the stop-loss level of RM0.075, the low of of the past two months. The price target is the April 2011 high of RM0.12, followed by RM0.15 – the high of Feb 2011, provided that the psychological RM0.10 is violated. A close below RM0.075 will invalidate the trade and hence, lead to the stock trading sideways at best.
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