Eye On Stock

VS INDUSTRY Bhd (code: 6963) has been moving along a sideways channel since the onset of consolidation in April.

There have been a couple of attempts to move towards the upper end of this range, set at 99 sen, although the stock remains tightly wound against the short-term 14- and 21-day short-term simple moving averages (SMA).

The horizontal movement isn’t expected to last forever, however.

There is potential for immediate upside should the stock make another attempt to rise out of the consolidation channel. Amid the improving trend, the 50-day SMA line has curved higher below the trading price and is offering some upward support to the counter.

Frustratingly, Friday’s performance yielded little commitment as the share price slipped one sen below the reference price. At present, there is a lack of buying interest to trigger a swing higher, but in the event of positive price action, the counter is poised to challenge the upper resistance.

Looking at the technical indicators, the slow-stochastic shows the percent K oscillator falling past the percent D oscillator. The negative crossing remains tentative however and can be reversed should the stock make an advance in the coming sessions.

The 14-day relative strength index has been idling in the neutral area amid the indecision. At 43 points, the index remains at a reasonable level and offers room to grow in the event of an upswing in interest.

Most undecided is the daily moving average convergence/divergence (MACD) line, which is lying flat against the signal line and ever so slightly in negative territory. As with the other two indicators, the onset of buying interest will pull the MACD into positive territory, away from the signal line and trigger a “buy” call.

Resistance is set at 99 sen with a break out taking the stock to RM1.06. Support can be found at 84 sen and 78 sen below that.

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