SUPPORTLINE by FONG MIN YUAN

K-STAR Sports Ltd has managed to push higher past the uppermost 100day simple moving average (SMA) following a recent breach to suggest there may be more upsides over the immediate term. The stock gapped up at the opening bell on July 25 to signal the start of renewed positive momentum and has since been pushing higher to develop a short-term ascending trend line. However, the daily price chart has been looking bearish since April. A steep descent in share price between April and July has resulted in negative crossings between the key SMA lines, most notably between the 50- and 100-day SMAs, which is a bearish development. On the brighter side of things, the short-term SMAs are rising rapidly given the positive performance of recent days, suggesting that the situation may correct itself given continued improvement over the immediate term. At Tuesday’s trading high of 11.5 sen, the counter may be pushing higher towards a resistance of 12.5 sen. The April peak of 15 sen would be next on target, but investor interest would have to pick up from the low levels seen in July and August. Towards the lower end of the price chart, the 100-day SMA provides support at the RM1 mark while the 200day SMA at the 91-sen level offer further support. The technical indicators look reasonably healthy. The slow-stochastic momentum index, which was en route to neutral ground, has halted in its tracks and made another move upwards. The percent K oscillator has made a positive crossing with the percent D oscillator, indicating a “buy” signal. The 14-day relative strength index, meanwhile, is moving ahead in overbought territory at 90 points. The daily moving average convergence/divergence line is picking up the pace ahead of the signal line in positive territory, suggesting that this postive trend may have some legs.

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

Note: This article first appeared in StarBiz Premium yesterday.