SUPPORTLINE by FONG MIN YUAN

VISDYNAMICS Holdings Bhd gapped up at the opening bell on Monday to rack up as much as 10.5 sen to a closing high 70.5 sen. The steep increase saw the counter break out of consolidation mode and restart a rising trend. The longer-term technical outlook for the stock has been improving since August when the 50-day simple moving average (SMA) slipped above the 200day SMA to enact a “golden crossing”. While the counter suffered a steep correction on Aug 30 and Sept 3 after falling nearly 25% to a recent low of 52.5 sen, the subsequent rebound appears to have taken root. At Monday’s trading highs, the stock breached its immediate resistance of 69 sen and was on course to hit the recent high of 73 sen. Based on the stock’s current share price momentum, there is a possibility it could cross the immediate resistance and challenge the aforementioned recent peak. The momentum indicators have perked up from Monday’s strong buying interest. The slow-stochastic momentum index is on a rise at 78 points while the 14-day relative strength index is also climbing rapidly at 73 points. Given that these two indicators are ascending at a good clip but remaining below and slightly into overbought conditions respectively, investors could be looking forward to further gains over the immediate term. The daily moving average convergence/divergence line has curved up and crossed the signal line in a bullish turn to give a “buy” signal. To the bearish end of the chart, failing momentum might see the counter subside to the lower end of Monday’s upside trading gap at 62 sen. Further support can be seen at 52.5 sen, where the stock experienced its recent low. The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.