SUPPORTLINE by FONG MIN YUAN

BENALEC Holdings is seeing a return to higher levels of trading on positive momentum. On Tuesday, the counter passed the 40-sen mark to hit an intra-day high of 40.5 sen.

The stock has undergone a healthy reversal since bottoming out at 36 sen on Feb 6 and undergoing three weeks of indecision before making another push to greener pastures.

At Tuesday’s high, the counter is touching upon an immediate resistance but looks likely to push through to the next hurdle at 42 sen, where the share price meets the uppermost 200-day simple moving average (SMA). The 200-day SMA has remained intact since June 2017.

A recent peak of 43 sen set on Jan 9 lies beyond that obstacle.

However, given that the stock could not hold on to the early gains on Tuesday and returned to a supporting level of 39 sen at the close, sustained buying interest in the coming trading sessions would be crucial to maintaining the current uptrend.

As at Tuesday, investor interest in the counter was on the uptick as evidenced by the ramp up in the trading level.

With regards to the technical indicators, the slow-stochastic momentum index crossed into a “buy” signal on Monday and has passed the mid-level 50-point mark to return to bullishness.

The 14-day relative strength index has passed the overbought line but looks likely to continue rising into the more extreme end of the chart.

The daily-moving average convergence/divergence histogram is also growing stronger and on the verge of a positive crossing with the zero line.

The share price is presently sitting on the support at the 39-sen mark, which meets the 50-day SMA. A further support can be found at the 37-sen level.

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

Note: This article first appeared in StarBiz Premium yesterday.