INSAS has been in correction mode since hitting its recent peak of RM1.14 in July, the best level in three years. The short-term descending trend line shows several attempts to break out of the downtrend when prices were in the downward adjustment process, but with no success. On Nov 14 the counter fell through the bottom-most 200-day simple moving average (SMA), resulting in negative crossings by the 14- and 21day SMAs. But in the wake of an apparent bout of fresh bargain hunting interest, the share price is now attempting to return above the 200-day SMA on a technical rebound. A breakout of the current bearish trend will require the stock to rise above the 200-day SMA at the 96.5sen level and push on past the descending trend line at 98 sen. If the counter fails to charge out and returns to a negative trajectory, the fall of the SMA lines will accelerate, completing the dead crossings and putting the counter under tremendous pressure. Looking at the technicals, the daily moving average convergence/divergence histogram is on the brink of giving a “buy” signal and perhaps rise out of the bearish area of the chart, while the slow-stochastic momentum index is pushing higher.
The 14-day relative strength index shows some pick-up in the rebound.
Looking less optimistic, however, is trading volume, which remains subdued at this point. Unless the present rebound can attract follow-through buying, there will be insufficient interest and momentum to trigger a bullish breakout.
Immediate support for the stock is pegged at the 90-sen level, while more concrete support lies at the 76sen level.
The comments above do not represent a recommendation to buy or sell.
Note: This article first appeared in StarBiz Premium yesterday.