SUPPORTLINE by FONG MIN YUAN

IJM Corp Bhd put in a third straight day of advances on Monday after hitting a recent closing low of RM1.45 on Oct 10. While the daily price chart shows a bearish trend with key simple moving averages (SMA) that exerting negative pressure on the share price, the stock’s current recovery is showing potential upsides. The rebound has taken root for the immediate term with the stock headed for the resistance at RM1.67. At Monday’s session high of RM1.62, the resistance is not too far off and could be breached with the continuation of the buying interest seen in recent days. The next resistance rests at RM1.77, which could serve as a stiffer hurdle to halt or turn back the current retracement. As at Monday, investor interest in the counter remained elevated, given the bargain-hunting following the selloff on Oct 10. At current price movements, IJM’s share price has returned to 2009 trading levels. The momentum indicators are showing positive developments with reasonable entry levels. The slow-stochastic momentum index has pushed past the neutral level at 51 points, and given the rapid ascent, there looks to be more gains in the immediate term. The 14-day relative strength index has also risen from the oversold area to 40 points, and pushing higher. The daily moving average convergence/divergence (MACD) line remains in a bearish position to the signal line. Short of a positive crossing between the MACD and the trigger, a positive trend is yet to be established. On the bottom end, the recent low of RM1.39 serves as a supporting level. A negative crossing of this mark, however, would see the stock descend towards the next support at RM1.33.

The comments above do not represent a recommendation to buy or sell.

Note: This article first appeared in StarBiz Premium yesterday.