SUPPORTLINE

EA TECHNIQUE (M) Bhd‘s price action on Wednesday suggested a growing push out of consolidation mode. The stock was trapped below the 52 sen resistance in recent sessions although the rise to a 54 sen high in Wednesday intra-day trade saw a breach of the obstacle. As the share price closed the day lower at 50.5 sen, there needs to be a follow-up positive performance in the ensuing session to help confirm the crossing and return to upside movement. Lending support to the continued rise of the share price, the shortterm trend on the daily price chart remains positive as the stock’s positive rebound that started at the end of October remains intact and looks set to continue following a breather. The technical indicators help to confirm more upwards movement ahead. The slow-stochastic momentum index has reached 56 points, suggesting more room for growth before it enters overbought territory. The 14-day relative strength index also sits at 60 points and has made a turn lower, indicating falling momentum although it remains at a healthy level over the midpoint. The daily moving average convergence/divergence line is also positive, picking up more momentum above the signal line. The next hurdle for the counter lies a 56 sen, which if attained would serve as a temporary resting place or venue for profit-taking as the momentum indicators attempt to neutralise. A challenge of the 60.5 sen mark above that would see the stock return to the peak hit in the first week of October. On the lower end of the chart, the lower end of a trading gap serves as a potential support for the stock at 46 sen. A further support at 44 sen below that meets the 100-day simple moving average (SMA).

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

Note: This article first appeared in StarBiz Premium yesterday.