DAILY TRADING STOCKS: Naim Indah, Borneo Oil

Naim Indah’s daily chart

Naim Indah needs to stay above the short term support to keep its rally intact. We highlighted this stock early this month in  our Hot Stock report, pointing out that the upside bias of its rally since Jan is expected to stay as long as the stock closes above the psycholgocial RM0.50. This turned out correct as the stock’s price  rally picked up pace. It  was again thwarted by the RM0.70 resistance level but despite the pullback  in the past 2 weeks,  its outlook remains unchanged.  In fact, the  stock’s  downward momentum has  been easing in the past 2 days, as seen from the “Small Dojis”,  which indicate  support just above  the  psychological level. However, buying is only confirmed on  a  close above the 2-day high of RM0.52, and a purchase can be made if this comes with a stop loss on  a  close below yesterday’s low of RM0.49.  This will keep the series of higher lows intact.  Resistance remains at the previous levels  at  RM0.60 and RM0.70 but a successful violation of both levels  could see it testing  the  psychological RM1.00.  A  trade may not work out if the stop loss is triggered and a consecutive close below RM0.50 may turn bias down. A close below RM0.41 should confirm the weakness and may even spell the end of the 3-month uptrend.

Borneo Oil’s daily chart

Borneo Oil’s share price  has to stay above the broken resistance to keep its  upward bias intact. This stock was previously featured in Hot Stock on the possibility of its uptrend continuing should the sideways consolidation end. The upward move did not materialize and the  stock continued to  consolidate. Nonetheless,  its  upward bias remained intact throughout the 5-month consolidation,  as seen from the series of higher lows and the rising 50-day MAV line. The consolidation is likely to have ended yesterday when the stock closed above the 6-month resistance at RM0.45 on heavy volume, suggesting firm buying interest. Another close above  this  price today  should  confirm  the breakout and  while  a  purchase can be made above RM0.45, with a close below  the  3-month low of RM0.39 as stop loss.  A more aggressive trade may  entail using yesterday’s low of RM0.425 as  a  stop instead. A measured move based on the Oct 2011 rally could see  the stock jump to as high as RM0.55, provided that  it breaks the  prior highs of RM0.465 and RM0.50. A close back below RM0.45 today may signal  a  possible false break, with a close below RM0.425 as confirmation. Strong support lies at RM0.39, a violation of which may signal the end of the uptrend.  

Source: OSK188