SUPPORTLINE

XIN Hwa Holdings Bhd showed a brief surge of momentum on Monday as the week opened to a sea of red on Bursa Malaysia. However, the momentum failed to hold and the counter retraced gains to end lower by market close. The counter displayed bullish momentum last Friday when it pushed ahead in an attempt to break out of the downtrend it has been trapped in since November last year. At its intra-day high of RM1.24 on Friday, the counter had risen above the uppermost 50-day simple moving average. Monday’s performance continued to see the counter rise higher in early trade, although as the session progressed, it showed a significant correction to a day’s low of RM1.13 before ending at RM1.17. The counter is still under pressure from the descending trend line at RM1.26, and shows that the bears continue to be very much in control. Looking at the technical indicators, the slow-stochastic momentum index has risen out of the oversold area into the higher range of neutral territory since last Friday. The 14-day relative strength index also displayed a positive trajectory on Friday but has since reversed gears to head towards the oversold line. Meanwhile, the daily moving average convergence/divergence histogram has been flirting with the trigger line before ending with a “buy” signal on Monday, but has yet make head- way into positive territory. There has been a notable lack of trading volume during this counter’s latest attempt to reverse its fortunes, and certainly, more buying interest is needed before the stock can develop the momentum to sustain a meaningful uptrend and push through the stiff resistance. Immediate resistance lies ahead at RM1.20 while to the lower end of the chart, the counter faces the risk of further retreat towards RM1.10.

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

Note: This article first appeared in StarBiz Premium yesterday