EYE ON STOCK
AFTER peaking temporarily at a high of RM4.02 on May 23, the best since January 1994, following a massive rally, Mega First Corporation Bhd (MFCB; Code: 3069) shares tripped into a mild consolidation mode.
The process lasted almost two weeks before the bulls made a fresh effort to resume the upward thrust.
But it was a futile attempt, as this stock could not attract follow-through interest and subsequently, the bulls abandoned the idea at the RM4 level on June 5.
Soon, MFCB slipped into correction mode again, which witnessed prices violating the 50-day simple moving average line of RM3.70 for the first time in six months to touch a low of RM3.68 on June 22.
Following the tentative breakdown, this stock risked falling deeper into the red on a prolonged downtrend going forward, but the bulls fought back and led prices to a rebound. MFCB recovered to within striking distance of the recent rally peak of RM4.02, hitting a high of RM3.97 during intra-day session yesterday, thus raising the prospects that the continuation in the uptrend may come about pretty soon.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochatic momentum index were on the rise. They are now approaching the bullish territory after triggering a short-term buy at the oversold area on June 23.
Mirroring the uptrend, the 14-day relative strength index improved significantly from a reading of 26 on June 22 to settle at the 69 points level yesterday.
In addition, the daily moving average convergence/divergence histogram had indicated a strong convergence pictogram and is poised to climb above the signal line to issue a buy call over the next couple of days.
Technically, indicators are painting an encouraging landscape, implying the bulls are likely to charge shortly.
If successful, they are expected to face resistance at every 20 sen intervals, at RM4.20, RM4.40 and the next, at the RM4.60 hurdle. The next upper heavy barrier is seen at the RM4.87 level, a level last hit on Jan 12, 1994.
As for the downside, the recent ebb of RM3.68 will act as a crucial floor.