LONDON Biscuits Bhd has been trapped by the uppermost 200-day simple moving average (SMA) over the two weeks as the rally slipped into consolidation mode. Despite breaching the SMA line over the course of this time, the share price returned under on a lack of follow-through buying interest. Nevertheless, the uptrend remains intact on the short-term daily price chart, and conditions have improved since early May when the stock started picking up gains. There is a long-term bearish formation from the negative crossings of the SMAs, but this may be gradually unwinding as the short-term SMA are on track to push past the 200-day SMA. On Tuesday, the stock rose past the 200-day SMA once again to target the resistance of 61 sen. A positive crossing of this hurdle would see the counter resume its rally and a possible ascent towards a higher target of 67 sen. To the lower end of the chart, the 57 sen mark serves as the immediate support. The 50-day SMA at 54 sen serves as a more crucial support. If it falls through, the stock would return to a more bearish outlook. Investor interest in the stock has been elevated in August and continues to be high. The technical indicators are also moving high- er with the slow-stochastic momentum index at 56 points. The 14-day relative strength index is on an upwards trajectory and is pushing ahead at 58 points. The daily moving average convergence/divergence line remains at a negative position to the signal line but is above the neutral line, suggesting that the uptrend remains intact.
The comments above do not represent a recommendation to buy or sell.
Note: This article first appeared in StarBiz Premium yesterday.