Ringgit Interest Rate Swap (IRS) Market

As at Friday’s 11am pricing, the IRS curve inched higher in response to the rise in MGS yields. Elsewhere, the 3-month Klibor remained at 3.43%.

TMC Life Sciences (Code: 0101) reached its all-time high of 99 sen on Nov 4, 2016, after a 15-month rally.

A challenge to the historical peak was mounted once again in February this year but in failing to penetrate, the counter found itself tripping into extended correction mode amid persistent profit-taking selling, and descended to the 73-sen support level on Sept 11, 2017. Incidentally, the correction represented a Fibonacci retracement of about 50% of the rally from August 15, 2015, to its peak on Nov 4, 2016.

TMC was poised for a rebound, leading to a decisive spike in the shares on Sept 29, 2017, which witnessed the bulls breaking free of the medium-term downtrend.

Investors took pause as the indicators moved slightly into overbought conditions but after a breather, they now appear to have the energy to resume the rally. Yesterday, TMC shares gapped up 2.5 sen to open at 85 sen before ending the trading week at 86 sen.

A successful penetration of the uppermost 200-day simple moving average (SMA) line at the 87-sen barrier may see this stock breaching the last major hurdle before it attempts another challenge to the 99-sen peak.

Trading volume on Friday was a considerable increase from recent days, meeting levels seen during the breakout rally in September, suggesting this stock has caught the attention of investors. An uptick in all the technical indicators further confirm a bullish bias.

The daily slow stochastic momentum index issued a short-term buy signal in mid-week trading with the oscillator per cent K now pulling further away from the oscillator per cent D. Also, the daily moving average convergence/divergence histogram, which has been intertwined with the trigger line in recent days, is pushing deeper into positive territory.

Meanwhile, the 14-day relative strength index is poised in an upwards trajectory on the overbought area. The 200-day SMA of 87 sen, however, poses strong resistance, and if the buying momentum loses steam, his stock is likely to retrace to the 80-sen level owing to an apparent profit-taking selling.

The next lower support floor is pegged to the 77-sen mark. — The comments above do not represent a recommendation to buy or sell.