SUPPORTLINE

ATTA Global Group Bhd has had a good start to the week, pulling strongly up from a downtrend to rise above its short-term descending trend line. Over the last six months, the counter had been retracing its gains made in an uptrend during the first half of this year. Hitting a recent peak of RM1.31 on June 14, the stock retraced about 85% of its gains before bottoming out at 66.5 sen on Dec 13. On Tuesday, the counter rose 10 sen to close a gap left behind Nov 2, and confirmed a new leg of uptrend. Trading volume spiked, suggesting the counter had caught the attention of investors and new buying interest had emerged. On Wednesday, the stock hit an intra- day high of 94 sen, crossing the uppermost 200-day simple moving average at the 92 sen mark, which will see it headed for the next hurdle at RM1.10. The technical indicators are looking bullish. The daily moving average convergence/divergence histogram has triggered a “buy” signal and peeped out over the the neutral line into positive territory, confirming an uptrend. The slow-stochastic momentum index has also been moving strongly upwards although it is now in extended overbought mode at nearly 100 points. The indicator may be looking to return to more neutral ground over the next few days, lending the likelihood of a price correction before the counter resumes its ascent. The 14-day relative strength index is also in overbought mode at over 80 points, and its rise has tapered out somewhat. However, there is still room for movement before it falls back into the neutral area. Support for the counter lies at 78 sen, which coincides with the 50-day SMA, while a further dip would take the counter back to a buffer at 66.5 sen.

The comments above do not represent a recommendation to buy or sell.

Note: This article first appeared in StarBiz Premium yesterday.