EYE ON STOCK
AIRASIA X Bhd (code: 5238) may have finally hit bottom following a steep decline since August that shaved off about a quarter of its value to a low of 27 sen on Sept 12.
The stock had come under heavy selling pressure with disappointing second-quarter earnings triggering a further selldown, as evidenced by the gap down on Sept 3.
However, the share price is currently moving in consolidation mode and there may be an attempt to retrace some of the losses over the immediate term.
While the share price has been trading sideways since mid-september, the momentum indicators have been recovering and returning to positive territory. This indicates a build-up of bullish strength over the course of the last two weeks.
Yesterday, the counter put in a positive performance one sen to rise to a day’s high of 29 sen. Trading volume remained subdued but any pick-up in buying interest over the near term would see a ramp up in the current recovery process.
There will be significant upsides should the stock assume a rally. There are hurdles starting from 32 sen but should the counter surpass these obstacles, it would meet its stiff challenge at the 33.5-sen mark.
This latter resistance represents the 50-day simple moving average as well as the upper limit of the downside trading gap left behind on Sept 3.
It would take a crossing of this resistance before the stock can been seen to turn bullish but nevertheless, investors looking for a cheap bargain can consider the upsides seen in the immediate term.
To the lower end of the chart, the 27-28 sen range represents a nearby support, although any fall through the lower end of this range would be very bearish.
Looking at the technical indicators, the slow-stochastic momentum index remains in oversold territory at the 0-point mark.
Improvement in the 14-day relative strength index at the 34-point level is also positive.
Meanwhile, the daily moving average convergence/divergence line is curving bullishly above the signal line to issue a “buy” signal. The comments above do not represent a recommendation to buy or sell.