WAH Seong Corp Bhd began a period of uptrend in the wake of renewed bargain hunting interest after having bottomed out at 63.5 sen on June 2, last year.
In the ensuing months, the counter’s simple moving average (SMA) lines corrected themselves from a “death-cross” position and began a period of recovery.
There was a spike in investor interest in the stock in October, which saw a surge in trading volume and a steeper upwards trajectory to cross the RM1 threshold and beyond. Based on the daily price chart, the stock touched the immediate resistance level at its intra-day high of RM1.20 on Tuesday, displaying that there is still momentum behind this recent push although investors cashed in on the increase, bringing it back to its opening price of RM1.16. The counter has left the SMAs behind, with the 14-day SMA being the springboard for upwards movement. The 200-day SMA has been intact since the bull face formed in December last year, and continues to lend a healthy curve for the uptrend.
The technical indicators also lend a positive outlook to the counter. The slow-stochastic momentum index is pushing higher on the chart but remains below the overbought line.
Elsewhere, the daily moving convergence/divergence histogram looks bullish and is angling further north of the signal line.
Also, the 14-day relative strength index also shows strength in the current trend, having moved back across the overbought line, but remains healthy.
To the upside, crossing the RM1.20 hurdle, this stock will face the next resistance at the RM1.28 level.
On the flip side, should there be any pullback owing to profit-taking activity, immediate support for the stock is pegged to the 14-day SMA at the RM1.10 mark, while the 50and 100-day SMAs offer more support at the 98 sen to RM1 range.
The comments above do not represent a recommendation to buy or sell.
Note: This article first appeared in StarBiz Premium yesterday.