SUPPORTLINE by FONG MIN YUAN

KUMPULAN Perangsang Selangor Bhd’s bounce off the supporting line of RM1.52 on Sept 12 may have signalled the end of the stock’s 1½-month downtrend. The counter has been moving sideways over the last two weeks before picking up on Wednesday to decisively breach the short-term descending trend line. The positive price action saw the share price surge past the short-term 14- and 21-day simple moving averages (SMA) and approach the 100-day SMA. A positive crossing of the long-term SMA would be a bullish development for the counter and put it in good stead to challenge the higher resistance. While the downtrend has been halted, the bulls are yet to take control with a sustained uptrend more visibly taking place past the RM1.73 mark. Some strong buying interest would be needed to punch through the obstacle although the RM1.73 would be a reasonable target for profit-taking. A lower resistance of RM1.70 is also present and may prove to be a deterrant to further share price growth. In the event of fading momentum, the share price will find support at the recent low point of RM1.52, with further support seen at RM1.44. The slow-stochastic momentum index has been rising at a rapid pace and is travelling northwards of over- bought territory. At 82 points, the index is poised to enter more extreme overbought conditions, which suggests the rally may need to take a breather before it continues its upwards push. The 14-day relative strength index is also on a vertical climb, rising to 58 points. The daily moving average convergence/divergence line is curving upwards in a bullish turn, suggesting the start of a positive trend. The comments above do not represent a recommendation to buy or sell.