DAILY TRADING STOCKS: SKP Resources, Focus Dynamics (English Version)

SKP’s daily chart

SKP’s share price may  trade higher after closing above the significant resistance level last Friday. The stock was featured last month  on the  possibility of  undergoing a  correction. The stock formed weak candles just below the psychological RM0.50. Selling was seen by way of a “Long Black” candle on 1 March but the expected follow-through selling did not happen. Instead, the  price has slowly edged higher. It has now closed above the RM0.50 level for two days in a row. It was accompanied by high volume, the highest since the start of the year, which suggests good buying support. Therefore, the chances of a false breakout  have beenminimised and look for the stock to trade higher. Purchases can be made above RM0.50 with a stop on close below the “Long Balck” low of RM0.46.  The price target is RM0.70, based on a measured move of the Jan-Feb rally. The trade will not work if the stock closes below RM0.46. This will confirm the false breakout of the RM0.50 level and look for  the price to fall instead. Support is expected RM0.39, the gap of 25 Feb and the 50% retracement of the Jan-Feb rally.

Focus Dynamics’ daily chart

Focus Dynamics’ share price may trade higher if it can violate the short-term resistance level. The stock has been  consolidating sideways for 3 weeks now, after making a 2-year high in midFebruary. A negative “Shooting Star” was formed on 21 Feb, highlighting the presence of sellers below RM0.16,  which is  the highest close of the current rally. Nonetheless, the upward bias has not diminished as the negative candle  had  only induced a shallow sideways correction. As such, the possibility of a continuation of the rally  stays high. The resumption of  the  rally is only confimed on a close above RM0.16, and positions can be initiated  when  this happens. The 3-week low of RM0.14, also the high of Nov 2011, can be employed as stop loss. A measured move based on the February rally could see the price head towards RM0.25 – a major support in 2007 – provided that  the RM0.20 psychological level is violated. A strong move could even see it testing  the  2008-high of RM0.30. However, look for the correction to continue should the stop loss be triggered. Support  is expected at RM0.125 and RM0.11,  the Fibonacci levels of  the  February rally.  Also, strong support  lies at the January-low of RM0.09 and a close below may signal the end of the 6-month rally.

Source: OSK188