HOT STOCK: Prinsiptek- Breakout Attempt Detected

Breakout Attempt Detected

Yesterday, an obvious breakout attempt by Prinsiptek was detected as the stock came knocking on the 100-week MAV line with stronger volume. A successful violation of the moving average line  could trigger a major breakout. Hence, we advise traders to accumulate its shares should a breakout occur. The upside targets are pegged at the RM0.27 level and RM0.29–RM0.305 area. Consider cutting loss if the share price retraces back below the 100-day MAV line.

The 100-week MAV line has been exerting downward pressure on Prinsiptek’s share price since 2010. In 2011, there were two instances of failed breakout attempts at the moving average line.  An obvious failed attempt took place in Jan  2011 when its volume shot up abnormally but yet it could not move above the 100-week MAV line. Such a development implies that the stock faces heavy selling pressure at that particular moving average line. 

We will see whether the 100-week MAV line could be violated this time around. As a break above this line could trigger a major breakout, we advise traders to accumulate its shares beforehand. If a breakout does occur, we expect to see greater upward momentum as the moving average line has been capping its upside for a considerable amount of time. The upside targets are pegged at the RM0.27 level and RM0.29–RM0.305 area. After taking positions at above the 100-week MAV line, traders should also cut loss if the share price drops back below the moving average line.

The 100-week MAV line, which is  currently  the stock’s immediate resistance, is currently situated at the RM0.255 level. Additional resistances are seen at the RM0.27 level and RM0.29–RM0.305 area. And from the current level, look for immediate support at the RM0.235 level, followed by the RM0.21 level.

Source: OSK188