SUPPORTLINE by FONG MIN YUAN
INARI Amertron Bhd extended its rebound on Monday to an intra-day high of RM1.88. The stock had begun its rebound off a low of RM1.60 on Nov 28 after a decline over the month shaved 39% off its share price. Since then, the daily price chart has showed the share price climbing past the short-term simple moving averages (SMA). As at Monday’s high, the stock had crossed the short-term descending trend line at the RM1.86 mark, would represents a breach of the resistance and signal that the share price retracement is set to continue. Continued buying interest over the coming sessions would see the continu- ation of the advance although profit-taking may temporarily bring the share price back below the trend line. The technical indicators suggest bullishness, prompting a continuation of rally over the near term. The slow-stochastic momentum index has risen sharply to 71 points, indicating bullish momentum and more room to grow over the immediate term. The 14-day relative strength index is also bullish at 63 points and remains northbound. The daily moving average convergence/divergence line has crossed the signal to suggest a ‘buy’ call and the resumption of a positive trend. Continued advances in the share price will take the counter towards the 50-day SMA at the RM2.02 mark. An approach of RM2.02 will also signal a 50% retracement of value lost during its November correction, further lending confirmation of a return to bullishness. A hurdle of RM2.05 lies just above the 50-day SMA, serving as the target at this stage of the rally. On the lower end of the chart, supports rests at RM1.60 with further support found at RM1.50. The comments above do not represent a recommendation to buy or sell.
Note: This article first appeared in StarBiz Premium yesterday.