The Star Malaysia - StarBiz
Eye On Stock
SARAWAK Consolidated Industries Bhd (code: 9237) is looking to end its range-bound direction, having made a strong intra-day advance yesterday to retrace recent losses.
The counter embarked on a correction on Feb 9 this year as investors took profit from the steep rally recorded in January, and took on a horizontal movement over recent days.
Some investor interest has since returned to the stock; with trading volume ramping up to its highest since before the correction began, there is reason to believe investors have latched on to a new positive catalyst.
Despite backing off the day’s high and ending the session only slightly higher, there remains a dominant bullish trend on the stock, which could facilitate the ongoing retracement. The 50-day simple moving average (SMA) has served as reliable support for the stock over the course of the past year, and should continue to offer lift to the share price as it ascends.
But first, the share price has to tackle the short-term 14- and 21-day SMAS overhead to clear a path for the bulls to roam towards the resistance of RM2.56. From there, the stock will be within striking distance of its historical high of RM2.73.
The technical indicators are lending support to the ongoing retracement. The slow-stochastic momentum index has returned from oversold conditions and is quickly gaining momentum at 35 points. The 14-day relative strength index bounced off the oversold line and is also gaining strength.
The daily moving average convergence/ divergence (MACD) line remains at a descending angle, but has slowed its rate of its decline as it approaches the zero line. There is expectation that the buying interest will trigger a bounce in the MACD at this point to return towards the signal line. Support is found at the recent low of RM1.76 and RM1.39.
The comments above do not represent a recommendation to buy or sell.