Eye On Stock

KOMARKCORP Corp Bhd (code: 7017) jumped higher yesterday as it extended the sharp rally that had begun in the week prior.

Defying the negative market sentiment that had pressured equities yesterday, the stock advanced past the 30-sen mark in intra-day trade before finishing at 28 sen.

At current trading levels, the stock has returned to October 2019 prices, which erases a large portion of the downtrend that had begun in September that year.

Over the last four trading days, the stock has built up its lead over the 200-day simple moving average (SMA) and is currently trading above all the key SMAS.

Lower down on the daily price chart, the 50-day SMA has crossed above the 100-day SMA, a bullish crossing that suggests that the negative formations have begun to unwind.

As the share price continues to advance, the positive trend will continue to build in the rapidly ascending short-term SMA lines, which are lending growing support for the share price.

Looking at the technical indicators, there is a risk of a pause in the rally as the stock is currently overbought as indicated by the 14-day relative strength index. However, conditions remain healthy as there is no sign of a retreat as yet.

The slow-stochastic momentum index had actually begun neutralising earlier in the week, which suggested consolidation pressures. Nevertheless, the onset of a buying catalyst sent the index returning higher to the overbought line and in positive mode.

Meanwhile, the daily moving average convergence/divergence line is pacing higher and away from the signal line in positive territory, reflecting the strength of the ongoing uptrend.

The share price sees immediate resistance at 30 sen with next resistance at 33 sen. In the event of consolidation the stock will find support at 27 and 26 sen.

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