Supportline

MI Technovation Bhd broke out of a consolidation channel on Tuesday to resume its progress along the ascending trend line. Rising to an intra-session high of RM2.64, buying interest has returned to the counter, which looks primed for more gains on a bullish outlook. Trading volume also showed improvement as it returned to a five-week high. The stock has been on a steep advance since embarking on an uptrend in August this year. While there were signs of the rally slowing in mid-september as it entered a sideways trading pattern, the uptrend managed to stay alive with a burst of momentum. At Tuesday’s trading levels, the share price looked set to challenge the immediate resistance of RM2.65. Given the growing momentum, which remains below overbought levels, there is opportunity for the stock to breach this hurdle and target a higher resistance of RM2.80. This would bring the share price to its 2019 high point, achieved in February this year. The daily price chart is also showing rising support levels for the stock. The immediate support is pegged at RM2.50. Falling through this point, the stock would re-enter a consolidation phase. Further support is pegged to RM2.37. Looking at the technical indicators, the slow-stochastic momentum index has risen to 75 points, leaving room for more growth before it enters overbought conditions. The 14-day relative strength index has crossed into overbought territory at 83 points, but looks poised to move in extended overbought mode. The daily moving average convergence/divergence line has also turned more bullish as it rose above the signal line, triggering a “buy” signal. Comfortably in positive territory, the MACD suggests that the current positive trend remains intact.

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

Note: This article first appeared in Starbiz Premium yesterday.