SUPPORTLINE by FONG MIN YUAN

BORNEO Aqua Harvest Bhd is breaking out of consolidation mode and moving into greener pastures. Having hit the 86-sen resistance on Jan 17, the counter fell due to a correction and descended to 74 sen, where it bounced off the support line and began a brief period of range-bound trading. A golden crossing had taken place between the 50-day and 100-day simple moving averages on Jan 18, which gave the stock a more bullish outlook. Despite the eventual pullback, the counter’s daily price chart has taken up a decidedly more bullish pattern. Borneo Aqua was one of the few counters on Bursa Malaysia that managed to keep its head above water during Tuesday’s broad-based selldown on the stock market. On Wednesday, the stock gapped up by half a sen at the open and proceeded to break through the 86-sen hurdle in intra-day trade, and move into a higher trading range. At its current trajectory, it is heading for the next resistance at 91 sen, with an eye for a loftier hurdle at 96 sen. The technical indicators confirm this positive bias with the slow-stochastic momentum index slipping slightly into overbought territory but with continued healthy momentum. The 14-day relative strength index mirrors this movement, and looks to be headed for more extended levels of overbought. The daily moving average conver- gence/divergence histogram has been moving in positive territory on the chart and is curving towards the trigger line for a “buy” signal. Buying interest in the counter has also continued, as seen from the healthy levels of trading. A price retracement to lower levels may see the counter return to close the trading gap left behind on Wednesday, and dip down to 81 sen. A more concrete support rests at the 74-sen mark, which proved reliable during the period of consolidation in the latter half of January 2017.

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

Note: This article first appeared in StarBiz Premium yesterday.