Dayang’s longer-term uptrend remains largely unscathed even
after its steep price decline in 2011 in tandem with the broader market. The
subsequent rally brought it right back
to the significant RM2.20
resistance level, which if successfully violated should see the stock continue
on its longer term uptrend.
Dayang was one of the
market outperformers during the broad market rally in 2009-2011, during which
the stock price more than
quadrupled from its 2008 low. The
stock’s long-term upward bias had remained unfazed although it was not spared
the market selloff last year. During the 6-month pullback, the stock retraced
by about 50% of the 2009-2011 rally, which is positive for an upward trend
based on Fibonacci analysis. The stock has rallied since then and is now back
above the 50-week MAV line, which is about to turn up again.
The 5-month rally has propelled the stock right up to the resistance level of RM2.20. Although its
all-time high is around RM2.50, the RM2.20 level is deemed a more significant
resistance as the stock only managed to close above this level once on a weekly
basis. This level is also the high of late 2010, April 2011 and the past two weeks.
Therefore, the continuation of the longer-term uptrend
should be confirmed if the stock convincingly closes above RM2.20. The stock is
expected to trade higher and a position can be initiated when
this happens, with a stop on
a close below RM1.90, which is a
prior support level and also the covered gap of 12 Aug. The initial target is
the all-time high of RM2.50, while a strong move may see the stock test the
psychological RM3.00, a measured move based on the pullback of 2011.
However, the upward bias will dissipate
if the stock fails to violate the
resistance level at RM2.20, while
a close below RM1.90 could see it trading sideways instead. Strong
support is, of course, at RM1.40, which if violated may signal the end of the
3-year rally.
Source: OSK188
No comments:
Post a Comment