SUPPORTLINE by FONG MIN YUAN

CCK CONSOLIDATED Holdings Bhd approached the uppermost 200-day simple moving average (SMA) on Tuesday, putting it in position to breach the overhead resistance.

The long-term SMA has been intact since November 2018 and a positive crossing would signal a return of bullish sentiment. However, it is notable that there was a brief intra-day breach of the moving average on Oct 4. This attempt to cross failed as the share price ended the day below the obstacle.

A similar development could take place with regard to the current challenge, following which the stock risks returning to consolidation mode. Support for the counter can be found at 51 sen, which represents the share price’s recent low, while a successful breach would put the stock above all the key SMAS, opening the gates for the bulls to roam higher to the 56.5 sen mark.

Taking a wider look at the stock chart, the dominant trend remains negative although things are looking brighter as the 50-day SMA has perked up to suggest a positive crossing with the 100-day SMA.

The short-term 14-day and 21-day SMAS are also rising to reflect the growing rally.

According to the technical indicators, the forecast is growing more positive. The slow-stochastic momentum index has crossed into a “buy” signal with the per cent K oscillator touching 43 points. The 14-day relative strength index is also looking bullish at 78 points and is yet to show signs of neutralising after breaking into overbought territory.

The daily moving average convergence/ divergence line has also crossed above the signal line while resting in positive territory to indicate a resumption of positive momentum.

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

Note: This article first appeared in Starbiz Premium yesterday.