SUPPORTLINE by FONG MIN YUAN

VS INDUSTRY Bhd‘s recovery has gained momentum since the stock hit bottom at 63 sen on Dec 18, 2018. The share price has since advanced past the short-term simple moving averages (SMA) as investors on the lookout for bargains picked up on the oversold counter. Nevertheless, there remains a long way to go for the share price to retrace its losses to November 2018 levels, where it sat comfortably above RM1.50. On Wednesday, the share price extended its advance towards the 50-day SMA at 95 sen. Hitting an intraday high of 93.5 sen, the stock was within arm’s reach of a positive crossing, which would have signalled a return of investor sentiment. Trading volume in the counter has been elevated since the stock’s sharp correction ended on Dec 18 and investors turned to buying. As long as buying interest in the stock remains, the recovery seems likely to continue with an eventual breach of the 50-day SMA hurdle. A subsequent target for the stock’s recovery lies at RM1.16, the upper limit of a trading gap left behind on Dec 17. On the supporting end, the share price could subside to the short-term 14- and 21-day SMAs converging at 83 sen. Falling below this, the share price would find further support at the 70 sen mark. The technical indicators are holding promise of a sustained advance. The slow-stochastic momentum index continued to pull ahead at 86 points, suggesting that it will remain in extended overbought mode for the time being. The 14-day relative strength index mirrors this movement at 78 points as it rises higher still to more extreme overbought conditions. The daily moving average convergence/divergence line is steadily ahead of the signal line and is on the verge of a crossing

with the zero line.

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

Note: This article first appeared in StarBiz Premium yesterday.