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EONMETALL Group Bhd (Code: 7217) is making a break for it. The stock passed the shortterm descending trend line in early session on Friday and proceeded to chalk up gains of five sen in intra-day trade to 86.5 sen, just off a recent high.

The counter returned to lower levels as the day progressed, dipping below the 85-sen resistance level to 82 sen. A more convincing breach is needed to confirm a breakout, failing which profit-taking is likely to ensue.

Based on the daily chart, Eonmetall shares have been on the upward march since March and reached a peak of 87 sen on Sept 12.

Thereafter, a strong pullback ensued and the stock fluctuated in range between mid-70 sen and 80 sen over the course of next two months.

A decisive spike on Nov 20, however, was the beginning of a new leg of uptrend as buying volume returned to the stock and investors began pushing the shares towards another breakout.

The counter has been trading closely to the 14-, 21- and 50-day simple moving average (SMA) lines and was joined by the 100-day SMA in the last week of September. These SMA lines offer strong upwards pressure and a boost for the counter, even as the 200-day SMA sits at a comfortable distance below the chart.

Elsewhere, the technical indicators also lend an optimistic view with the daily moving average convergence/divergence histogram striking for higher ground in positive territory.

The slow-stochastic momentum index, which has been retreating from the overbought area over the past week had turned sideways by Friday and was looking to give a “buy” signal anytime.

The 14-day relative strength index also looks bullish, dipping temporarily into neutral territory but now angling back upwards into the positive area.

Based on the positions of the SMAs, strong support is pegged to the 77-79 sen range, of which a fall below this floor would take it down to the 200-day SMA hovering near the 71 sen mark.

On the upside, should the stock scale past 87 sen, the next barrier comes in the form of the all-time-high of 96 sen made on Sept 9, 2016. —