The Star Malaysia - StarBiz - - News - by FONG MIN YUAN

MAJUPERAK Hold­ings Bhd broke out of the up­per­most 200-day sim­ple mov­ing av­er­age (SMA) that was ex­ert­ing neg­a­tive pres­sure on the share price on Mon­day.

The counter has been see­ing an in­crease in pos­i­tive mo­men­tum over the last two months.

The share price had been in de­cline since July 2017, tak­ing it from a high of 60.5 sen to a low of 24 sen in July.

The down­trend re­sulted in neg­a­tive cross­ing in the SMA lines, sug­gest­ing the for­ma­tion of a long-term bear mar­ket.

Nev­er­the­less, the re­cov­ery on the daily price chart over the last two months saw the stock mov­ing to a ses­sion high of 37 sen on Mon­day, which comes within arm’s length of the 38.2% Fi­bonacci re­trace­ment ra­tio at 38 sen.

There is re­sis­tance pegged to the 40 sen mark, which the stock would have to breach be­fore it moves in po­si­tion to re­trace to the 50% level at 42 sen.

To the lower end of the chart, the 200-day SMA is a re­sis­tance-turned-sup­port at 33 sen while the 50- and 100-day SMAs of­fer fur­ther so­lace at the 30 sen mark.

Look­ing at the tech­ni­cal in­di­ca­tors, the slow-sto­chas­tic mo­men­tum in­dex is be­low over­bought ter­ri­tory at 73 points and has curved down­wards in re­treat.

Nev­er­the­less, it re­mains at a healthy level and is short of giv­ing a ”sell” sig­nal.

The 14-day rel­a­tive strength in­dex re­mains be­low over­bought ter­ri­tory at 62 points.

Mean­while, the daily mov­ing av­er­age con­ver­gence/di­ver­gence line has crossed the sig­nal line to is­sue a “buy” sig­nal.

This sug­gests a con­tin­u­a­tion of the cur­rent rally.

In­vestor in­ter­est in the counter also picked up on Mon­day.

But sus­tained buy­ing is re­quired to see the stock take out the stiff re­sis­tance ahead.

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

Note: This ar­ti­cle first ap­peared in Star­Biz Pre­mium yes­ter­day.

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