Eye On Stock

KUMPULAN Powernet Bhd (stock code: 7130) displayed some signs of bullish sentiment on Friday as its share price broke free of the shortterm simple moving averages (SMA) and settled slightly above the 50-day SMA.

It was the first time the counter had traded above the 50-day SMA since before start of the movement control order.

The stock has been caught in a consolidation channel since the start of April, where its recovery peaked and took on a sideways trading direction. During this time, the share price has managed to stay ahead of the 200-day SMA, which suggests that some positive sentiment remains.

While the share price gapped higher yesterday, indicating the onset of bullish momentum, it remains to be seen if it is able to resume the recovery left off on April 1.

At the day’s close, the share price remained off the resistance of RM1.94, which needs to be crossed to indicate the resumption of a recovery trend.

Positively, investor interest in the stock was seen inching higher as the volume transacted rose above that of recent days to return to early April levels of trading.

It is also promising to note that the technical indicators avoided falling into oversold territory and are pacing higher on positive momentum.

The slow-stochastic momentum index bounced off the oversold line to rise to 46 points while the 14-day relative strength index has rise to 69 points. This indicates potential for the share price to challenge the immediate resistance as the stock looks to resume a short-term positive trend.

The daily moving average convergence/divergence line has stayed alive above the signal line and is rising towards the zero line.

A positive breach would help to confirm the return of a bullish trend. Resistance levels for the stock can be found at RM1.94 and RM2.10 while support levels are seen at RM1.50 and RM1.29.

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