EYE ON STOCK

AMMB Holdings Bhd (code: 1015) renewed its rally on strong momentum as investors reacted to a positive catalyst overnight.

While there were signs the counter was entering consolidation mode in December following a strong November rally, the counter gapped up at yesterday’s opening bell and proceeded to gain about 3% to an intraday high of RM4.44.

The advance has kept the share price moving ahead of the key simple moving averages (SMA). It receives nearby support from the uppermost 14-day SMA, which has remained intact since it made a positive crossing on Nov 1.

The month-long rally made a bullish reversal of the stock’s negative SMA crossings, suggesting a sustained bullish outlook for the share price.

The technical indicators are also pointing towards growing momentum, which is a positive development for the immediate outlook of the share price. Conditions are not yet convincingly overbought, which suggests that this rally may continue over the ensuing sessions.

The slow-stochastic momentum index has risen to 66 points, which indicates room to grow before it enters overbought conditions.

The 14-day relative strength index is pushing higher into extreme overbought conditions at 83 points but can move higher still before downwards pressure takes over as the index neutralises.

The daily moving average convergence/ divergence line is looking bullish ahead of the signal line, suggesting that the uptrend remains intact.

Buying interest in the counter continues to be healthy as it has been throughout November, and will be key to sustaining the ongoing rally.

Based on the daily price chart, the stock looks to be rising towards the immediate resistance at RM4.55. A higher target of RM4.70 would see the stock return to February levels of trading, about 10% short of the year’s January high of RM4.90.

To the lower end of the price chart, the counter is supported at the RM4.33 mark. The 21-day SMA at RM4.17 also serves as further support in the event of a retreat.