HOT STOCK: Key West Global Telecommunications Bhd - Extending Steep Uptrend Line

Key West’s share price continued to rally after breaking out from the RM0.16 level, with the stock still exhibiting strong upward momentum and signs of extending its steep uptrend line. It is expected to continue climbing at the current rate until the steep uptrend line is violated. Hence, we advise  traders to accumulate Key West’s shares now as the stock is likely to extend its uptrend. It had already hit our previous price target of RM0.19 and we are now eyeing the RM0.29 and RM0.34 levels as  our new targets.  Trades should cut their  losses should the share price close below the RM0.21 level, the violation of which is expected to take out the steep uptrend line too. 

In late February, we advised traders to accumulate Key West’s shares to bet on a breakout from the RM0.16 level or the Nov 2011 peak. A breakout did materialize and the subsequent momentum was very strong as its share price gained as much as 45% during the session, with our price target of RM0.19 also achieved.

Meanwhile, Key West’s  upward momentum appears to be still  robust. The stock continued to  scale higher at above the steep uptrend line. We advise traders to accumulate shares now and ride on the prevailing wave of optimism. Should the steep uptrend line continue to extend,  the share price is expected to the test the RM0.29 level or even the RM0.34 level, both of which represent major overhead resistances. The stock’s daily RSI closed at 69.6 pts yesterday which means that there is potential for the steep uptrend to power ahead. Its daily RSI reached the 80-pt level when the stock recorded an intraday gain of 45% mentioned earlier.

Nevertheless,  there could be higher risks  involved for initiating positions while  the  share price is appreciating quickly. Traders should consider cutting losses if the share price falls below the RM0.21 level, the violation of which is expected to simultaneously  take out the steep uptrend line. Going forward,  expect the  previously  strong  resistance area of  RM0.18-RM0.19, which was violated recently, to act as a very strong support level for the stock.     

Source: OSK188