SUPPORTLINE

HO Hup Construction Co Bhd has risen for three consecutive sessions to break out of consolidation and return to an uptrend. Last Friday, the counter rose above the short-term descending trend line that had been exerting negative pressure on the share price since October 2017. However, the break-out above the 100-day simple moving average (SMA) and approach towards the uppermost 200-day SMA over the last three sessions put the counter back on bullish footing with growing momentum. Trading interest over Monday and Tuesday spiked considerably and reached May 2017 levels. After the performance of these recent days, the technical indicators have entered overbought territory but there is no sign the rally has ended. The slow stochastic momentum index has risen to 83 points but continues to head upwards into extended overbought conditions. The 14-day relative strength index has tapered slightly at also 84 points, but continues to be growing. Meanwhile, the daily moving average convergence/divergence line has risen sharply away from the signal line and is pacing higher in positive territory, suggesting that the uptrend continues to build in strength. The immediate resistance on the higher end of the chart is the 200-day SMA which is pegged to the 55.5 sen mark. Passing this level, the share price would return to January highs where the stock hit a year-to-date high of 64.5 sen. The next resistance rests just above this level at 66 sen. To the downside, waning buying interest could see the counter subside to the 46 sen mark. Continued profit-taking past this point would take the stock to the following support at 40 sen.

The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.