EYE ON STOCK

PANSAR Bhd (code: 8419) experienced a surge in share price over Thursday and Friday to bring it to its highest level since 2010.

With its current bullish momentum, the stock looks headed for the previous high of 76 sen achieved on Nov 4, 2010.

Based on the daily price chart, the counter had been on an upwards move from Jan 5 to 29. Upon, hitting a peak of 51.5 sen, it lost steam and underwent a correction to 44.5 sen on Feb 6. However, from Feb 7, the indicators turned to a strong bullish signal, and the share price picked up into a full run.

This surge in interest is a clear departure from the performance of the counter over the course of the past year. The stock had previously showed indecision and consolidation with few catalysts to attract buying interest.

However, trading volume has been on the uptick since the first week of January, leading to a considerable spike on Friday, suggesting that the stock has captured the imagination of investors, lending good support for the positive momentum.

WIth regards to its corporate developments, Pansar’s proposed private placement of up to 10% of its total issued shares received approval from Bursa Securities on Feb 8.

The technical indicators have taken an upswing from these recent developments. However, despite the large price gains, the slow-stochastic momentum index is yet to hit overbought territory, suggesting more room to advance.

The 14-day relative strength index does indicate an extreme overbought condition but as at present, the indicator remains bullish.

The daily moving average convergence/ divergence histogram is also spiking upwards on strong bullish momentum and is further outpacing the trigger line.

While the indicators show that there is still room to grow, the counter is expected to pace itself, moving forward, with some profit-taking nibbling away at its ascent.

Dipping into the downside, the stock will encounter immediate support at 61.5 sen and 58.5 sen, both set way back in 2011. However, a more concrete buffer lies at the Jan 29 mark of 51.5 sen.

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