SIG GASES Bhd,

which has seen its share price falling since hitting a peak of 49 sen on June 16, may be making a rebound attempt.

The stock’s recovery since hitting a trough on March 18 has been promising, rising to levels not seen since January 2018.

The ensuing correction was expected with the 14-day relative strength index having risen into extreme overbought conditions.

With the outlook on the daily price chart looking bullish, the correction on the stock gave it some brief respite to neutralise the overbought conditions.

On Wednesday, the stock was seen retreating to the ascending trend line and in failing to break below it, suggested a rebound was in the offing.

This was confirmed on Thursday when the stock was seen bouncing higher above the key simple moving averages (SMA), indicating a resumption of a rally.

The share price rose to 48 sen at Thursday’s trading high but ended the day below the immediate resistance of 46 sen. Continued buying support could see a continuation of the rebound towards the stock’s recent high of 49 sen and beyond.

To the lower end of the chart, support is found at 44.5 sen, a negative breach of which would suggest the correction phase remains in play. Lower support is found at 43.5 sen.

On the technical indices, the slow-stochastic momentum index is close to triggering a “buy” signal as the percent K oscillator approaches the percent D oscillator.

The relative strength index is rising at 53 points, which offers healthy room for growth before hitting overbought levels.

The daily moving convergence/divergence (MACD) line remains positive and but is descending below the signal line. With a further session of gains, the MACD could turn higher to indicate growing momentum in the positive trend.

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