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ASTINO Bhd (Code: 7162) is undergoing a technical rebound after experiencing a period of strong selling pressure.

The counter was at an all-time high of RM1.27 on July 20-24 this year before entering correction mode.

A technical rebound took place in early September, which saw the stock attempt to return to elevated levels. However, the consequent pullback proved to be decisive, and the counter gapped down eight sen or 7% at the opening bell on Oct 21.

This major retreat triggered the occurrence of “death crosses” in the simple moving average (SMA) lines, with the 14-, 21-, and 50-day SMAs all taking negative crossing positions.

The downtrend bottomed out at 88.5 sen on Monday, precipitating a technical rebound on Tuesday. On Thursday, it reached an intra-day high of RM1.02 where it met with resistance in the form of the 200-day SMA.

Should the counter pull back strongly from the hurdle, it may trigger the final negative crossing between the 200- and 100-day SMAs.

However, if it should decisively breach the resistance, there would be upwards momentum to meet the uppermost 100-day SMA, and perhaps to even fill the gap left behind in October.

If we turn to the technical indicators, we see a promising, if slightly overbought, situation.

The slow-stochastic momentum index has risen into the lower regions of the overbought area. It needs to see continued buying interest to go into extended overbought mode, failing which it will attempt to neutralise.

Both the 14-day relative strength index and money flow index are in upright positions, and show that this trend has good momentum. The daily moving average convergence/ divergence histogram gave a “buy” signal early in the week and is angling decisively into positive territory.

This latest rebound appears to have legs although it would take some investor interest over the next few days to see a decisive breach. Passing the 100-day SMA resistance at RM1.07, the stock could rise to close the gap at RM1.13. Support for the stock lies at its recent low of 88.5 sen, while a breach will see it move downwards to close yet another open gap to the south at 75.5 sen. The comments above do not represent a recommendation to buy or sell.