SUPPORTLINE By FONG MING YUAN
DAYANG Enterprise Holdings Bhd, which halted its descent in recent trading days, showed some positive price action on Wednesday. The stock bottomed out on Oct 30, which put a stop to the stock’s sharp decline over the month of October. On Oct 1, the share price had hit a recent high of 87 sen before plunging more than 40% over the course of the month to a low of 50 sen. The stock has been moving in consolidation mode over the first week of November, but a recent turn in momentum may suggest it is time for investors to take a breather from all the heavy selling and consider capitalising on a rebound. The momentum indicators suggest there may be an upside bias in the days ahead given the rea- sonable levels of entry. Following Wednesday’s performance, the slow-stochastic momentum index looked on the verge of giving a “buy” signal and rose to 39 points. The 14-day relative strength index also rose from the oversold line to 36 points, which suggests growing bullishness. The daily moving average convergence/divergence line has met the signal line and will need just another positive performance to cross over and give a “buy” signal. At present, the key simple moving averages are all applying negative pressure on the stock, suggesting a strong bearish outlook. Neverthless, some immediate upsides to take the share price above the short-term 14- and 21-day SMAs remain likely. At Wednesday’s intra-day high of 53.5 sen, the share price remains firmly in consolidation mode. The immediate resistance of 54.5 sen lies overhead. A convincing breach of this hurdle would see the stock target a higher resistance of 58 sen. The support at 50 sen has held the stock afloat over two sessions in recent days. It is close-by however and a negative trigger would take the stock lower to the 47 sen mark. The comments above do not represent a recommendation to buy or sell. Note: This article first appeared in StarBiz Premium yesterday.