MYR Interest Rate Swap (IRS) Market

As at Friday’s 11.30am pricing, the IRS curve was higher following BNM’s 25bps rate hike to 3.25%. Elsewhere, the three-month KLIBOR remained at 3.44%.

CAHYA Mata Sarawak (code: 2852) has been pulling upwards in a bullish short-term trend line since it hit bottom at RM3.30 on Nov 21, 2017.

This period of positive movement has served to untangle the short-term simple moving average (SMA) lines from their negative postures, although the 50- and 100-day SMAs remain moving below the 200-day SMA.

The latest upward push in the trend comes off a quick corrective breather that took the counter back around the RM4 level before it resumes its ascent. Over the past week, it has shown some renewed momentum following a brief consolidation phase, suggesting the stock’s share price still has room to grow.

The technical indicators looked ready to retire during the consolidation but they have now been revived to signal more gains on the price chart. The daily moving average convergence/divergence histogram had been subsiding into the trigger line before narrowly avoiding a bearish crossing and bouncing back into a northbound trajectory.

The slow-stochastic momentum index has moved into overbought territory but continues to move healthily into more extreme conditions. The 14-day relative strength index is also in overbought conditions and continues to grow. The counter moved beyond the RM4.16 resistance level on Thursday, which freed the bulls to roam higher on the chart.

On Friday, the stock reached an intra-day high of RM4.33, which suggests it is striking for the next resistance at RM4.35.

Given the prevailing strength of the indicators, there is a good chance to arrive at the hurdle. Nearing the mark, a pullback to bring the overbought conditions under control may put the counter in yet another period of consolidation. However, based on the daily price chart, this has showed to be the stock’s preffered pattern of ascent, and may be another brief corrective phase before renewed momentum takes over.

Falling back into lesser regions of the chart, the stock will find support at the RM4.16 mark, although a breach of that would put it in danger of a bigger drop into the RM4 level.

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