Monday 12 March 2012

HOT STOCK: Olympia- Another Breakout Attempt at 200-day MAV Line


Another Breakout Attempt at 200-day MAV Line
Today we offer another trading strategy based on the 200-day MAV line. The daily chart clearly shows that Olympia has experienced five failed breakout attempts at this moving average line since June last year. Last Friday, this stock tried yet again  to take out this formidable  200-day MAV  resistance line when the trading volume was particularly high. Should Olympia eventually violate this line, we think the subsequent upward momentum should be massive. Hence, we advise traders to accumulate the shares should a breakout occur. We are eyeing the RM0.31 and RM0.33 levels as the upside targets, while a cut loss may be initiated should the share price retrace below the 200-day MAV line.

For many months, Olympia’s share price has been pressured by 200-day MAV line. From the above daily chart, we can see that every rebound attempt the stock has made since June last year has been capped by this moving average line. Finally, last Friday, the stock tried very hard to crack above this line, as evident by its higher trading volume on that day.

Hence, a trading  opportunity  presented itself at the 200-day MAV line. As the 200-day MAV line has  been  capping  the stock’s upside for so many months, an eventual breakout from this line is expected to give rise to impressive gains. Hence, we advise traders to accumulate Olympia shares should it violate the moving average line. We are eyeing the RM0.31 and RM0.33 levels - both of which represent the major highs created last year  - as the upside target. Traders may want to cut loss should the stock close back below this 200-day MAV line.

The 200-day MAV line, which now lies at the RM0.27 level, is now the immediate crucial resistance, while next resistance is seen at RM0.285, followed by the RM0.31 and RM0.33 levels. Immediate strong support lies at the RM0.24 level, followed by the RM0.22 level.

Source: OSK188

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