Eye On Stock

RADIANT Globaltech Bhd (stock code: 0202) surged in trading yesterday to break above the 200-day simple moving average (SMA). This spurt of investor interest indicates that a buying catalyst has been introduced, adding momentum to the stock’s budding uptrend.

This serves as the stock’s latest attempt to rise out of the recent consolidation channel, with the share price having taken a sideways movement since April this year.

Over the longer term, the share price has been on a bearish footing since falling off its perch after a strong debut on the Ace Market of Bursa Malaysia on July 24. Looking at more recent developments on the daily price chart, the share price has been gravitating higher in August, with the 14- and 21-day SMAs turning higher, suggesting a positive short-term trend.

With the 50-day SMA taking a positive turn towards the 100-day SMA, there may be a bullish crossing in sight, which would indicate that the stock has finally turned the corner. At Friday’s trading high of 26 sen, the share price came within striking distance of the immediate resistance of 26.5 sen. A breach of the obstacle would see the share price aim for the next resistance at 28.5 sen, representing the highest point since the start of the year.

Based on the technical indicators, the positive trend has picked up the pace with the daily moving average convergence/divergence line rising at a sharp angle off the signal line in positive territory.

However, both the slow-stochastic momentum index and 14-day relative strength index (RSI) suggest that the stock is in overbought conditions.With the slow-stochastic is falling at 86 points, this may signal a temporary pause in the rally below the resistance as investors take a breather from further buying.

The RSI looks more healthy despite being extremely overbought at 91 points, as the index continues to scale higher.

In the event of profit-taking, support can be found at 23.5 sen, which meets the 200-day SMA. Further support can be seen near the 50-day SMA at 21.5 sen, a crossing of which would signal a resumption of more bearish days.

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