Inari Amertron

INARI Amertron Bhd has seen some bullish developments since May 14, when momentum accelerated and it made a decisive crossing of the 50-day SMA.

Several days of consolidation ensued but the counter may be primed to resume an uptrend after crossing the uppermost 100day simple moving average (SMA) at RM2.09 on Monday.

On Tuesday, the counter continued to make progress and edged higher despite the slow stochastic momentum index moving in extended overbought conditions at 87 points.

The percent K line is tapering off at this level, suggesting it may soon seek a return to more neutral levels.

If it should return below the overbought line, some profit-taking may ensue, thus keeping the share price range-bound or in consolidation mode in the immediate term. However, the slow-stochastic remains healthily aloft at this point in time.

Furthermore, the other indicators remains bullish suggesting that the uptrend is not yet over. The 14-day relative strength index remains at 71 points and moving higher, while the daily moving average convergence/divergence line is looking bullish as it continues to pace higher above the neutral line.

In Tuesday trade, the share price rose to an intra-day high of RM2.19, which helped to confirm a sustained uptrend.

The next resistance lies at the RM2.35 mark with the recent peak of RM2.55 set in January lying yet further ahead.

A pullback might see the stock returning to the 50-day SMA at RM1.92, although a stronger support lies below at RM1.87.

An accelerated correction would see support at RM1.59.

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