SUPPORTLINE by FONG MIN YUAN

CARIMIN Petroleum has found some renewed momentum to keep it moving higher on the chart. With Wednesday’s gap up at the open and intra-day high of 43 sen, it would appear the counter’s uptrend is not over yet. The stock was retracing gains between Sept 25 and Dec 5, 2017, before bottoming out at 30.5 sen on Dec 5. The pullback saw a 95% retracement of the gains it had amassed from a share price surge over six prior trading days. The technical rebound marked the start of the current uptrend, which saw an ascending “step stairs” movement towards a recent high of 44.5 sen on Jan 9. The question now is whether the counter can still continue its staggered yet bullish progress or even take a larger leap into the statosphere? The gap up at Wednesday’s open may lend confidence to the strength of the current rally. The technical indicators suggest that the counter is headed up at a steady pace. The slow-stochastic momentum index has indeed given a “buy” call as at Tuesday, and is progressing steadily. The 14-day relative strength index reflects this movement and is edging towards overbought territory. The daily moving average convergence/divergence histogram is also rising on bullish momentum, suggest- ing the continuation of the uptrend. The counter should encounter some resistance between 44.5 sen and 46 sen, although a breach will take it to the 50-sen level. Should there be a price correction and the counter mark a new lower low, it will head for the supporting trend line at around the 40-sen mark. Breaking through this support will put the counter on a more bearish footing, although it will still find concrete support at the 37-sen level.

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

Note: This article first appeared in StarBiz Premium yesterday