SUPPORTLINE by FONG MIN YUAN

REV Asia Bhd is seeing some upside momentum even as the stock challenges the immediate resistance level in a possible breakout attempt. At the day’s high of 31 sen, the stock has passed the 30 sen hurdle, and met with the 100-day simple moving average (SMA). Should the counter break free of these obstacles, it would move out of consolidation mode, which it has been trapped in since April and move higher towards an ensuing resistance of 36 sen. The uppermost 200-day SMA at the 38-39 sen mark serves as the next higher target. Should the stock return to this trading level, it would have retraced about 50% of the losses it saw from October 2017 to April this year. While the SMAs have taken on bearish crossings, suggesting downwards pressure due to a steep and prolonged downtrend, there are indications that the stock is attempting to reverse its fortunes. Looking at the technicals, the indicators are taking on healthy postures suggesting a sustained rally may be in the offing. The slow-stochastic momentum index has has moved past the midpoint at 55 points, indicating bullish momentum. There remains room for the indicator to grow before it enters overbought territory. The 14-day relative strength index is also showing a bullish development at 65 points with plenty of room to grow before it enters overbought territory. The daily moving average convergence/divergence line site on the zero line and on the verge of crossing into positive territory ahead of the signal line suggesting growing strength in the uptrend. The share price is buoyed by a convergence of the 14-, 21- and 50-day SMAs at 26 sen. A fall through at this point indicates a bearish trend, with the following support pegged at 23 sen. The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.