SUPPORTLINE by FONG MIN YUAN

EA Technique (M) Bhd gapped up at Tuesday’s open and breached the uppermost 200-day simple moving average (SMA) to move ahead on strong momentum. The counter had been in a bearish state and trading below the 200-day SMA since June 2016. An attempt to overcome the hurdle resulted in a brief breach in September 2017, but the stock soon pulled back to a downtrend. The surge in share price on Tuesday on the back of rising buying volume, however, saw the counter break free of the consolidation it had been trapped in and looks to be a promising attempt at reversing its negative posture. At its session high of 45 sen, a continuation of buying interest could see the stock target a higher resistance of 52 sen, which was least seen in October 2017. However, as the stock’s share price returned below the 200-SMA by market close, there are indications that it remains trapped by the resistance as investors took profit from the sudden gains achieved on Tuesday. Looking at the technical indicators, positive momentum has built up and an upwards motion could resume as soon as the initial profit-taking subsides. The slow-stochastic momentum index showed signs of waivering as the percent K slipped past the percent D for a sell signal. However, the index is sitting at 47 points, which remains near the mid-point. Other indicators are more optimistic with the daily moving average conver- gence/divergence line sitting on the neutral line and attempting to cross into positive territory ahead of the signal line. The 14-day relative strength index also showed signs of bullishness as it moves further towards overbought territory at 68 points. Should there be a temporary pullback from the profit-taking, the 100-day SMA poses as a support at 37.5-sen mark although a convergence of the shorter-term SMAs at the 35.5-sen level suggests more concrete support. The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.