SUPPORTLINE by FONG MIN YUAN

MITRAJAYA Holdings Bhd turned to a positive trajectory on Wednesday on improving momentum following a brief period of consolidation. Finding support at the 38.5 sen level, the stock, which has been on a decline over the course of 2018 may see some reprieve over the immediate term. The resistance faced overhead looks overwhelming given the stock’s protracted decline. The key simple moving averages (SMA) are in negative crossings to one another, reflecting the long-term bear formation of the stock. Following the gap up at Wednesday’s opening bell and the subsequent advance to a session high of 44.5 sen, the counter is within striking distance of the immedi- ate resistance at 45 sen. Hovering just above this point is the 50-day SMA at 47.5 sen and 100-day at 49 sen. A positive crossing of thiese SMAs would suggest a growing bullishness for the stock. Should the buying interest fizzle, however, the stock lies at risk of returning to its recent low point of 38.5 sen, a crossing of which would see the resumption of a downtrend. For the immediate term, the momentum indicators suggest a positive trend is developing for the share price. The slow-stochastic momentum index has risen up from oversold conditions to challenge the oversold line at 30 points. The 14-day relative strength index, however, has descended towards 33 points. The daily moving average convergence/divergence line remains afloat of the signal line but remains submerged in negative territory. A greater pace of growth for the MACD as it distances itself from the signal line would indicate a growing bullish trend for the stock. Turnover spiked on Wednesday, returning to levels seen in July 2018, suggesting improving buying interest. The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.