Traders would need to analyze DiGi.Com’s monthly chart to
get a better picture of its current technical position. A “Long Leg Doji” was
created last month when its monthly RSI reached as high as 89.4 pts. Because
this bearish reversal pattern was created after a 2-year rally and it is
currently in overbought territory, we think the possibility that DiGi.Com’s
share price will start retracing or consolidating sideways in the coming months
is rather high. Should its share price retrace, we are eyeing the 10-month MAV
line as the downside target. We advise traders to sell DiGi.Com’s shares now.
DiGi.Com’s monthly chart is clearly signalling a potential
price weakness ahead as a “Long Leg Doji” was created last month, when its
monthly RSI reached an overbought level that reached as high as 89.4 pts. It is
the most obvious bearish reversal pattern created since the Global Financial
Crisis in 2008.
Because of the bearish reversal pattern which was confirmed by the monthly RSI reading of
89.4 pts, we think the possibility that
DiGi.Com’s share price will start
to retrace or trade sideways from
the current level is high. We advise traders
to sell DiGi.Com’s shares now. We are eyeing the 10-month MAV line, which now
lies at the RM3.45 level, as the downside target. The reason this moving
average line is used is due to the
fact that the stock has been trending
higher steadily at above this line after the Global Financial Crisis.
Nevertheless, a crack above its historic high of RM4.32 would completely erase
the current price weakness. Anyhow, we think the odds are
very low for the stock to scale to
greater heights without taking a breather.
Immediate support is seen at the RM3.52-RM3.62 area but
should its share price start retracing, we think that it is likely that the 10-month MAV line
will be tested. To the upside, the historic high of RM4.32
would be its immediate tough resistance.
Source: OSK188
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