In this report, we are
revisiting the stocks that were
highlighted in our previous Daily Trading Stock reports. As these stocks
have continued to garner market
interest, we are examining their current technical picture and
identifying the new levels to be mindful of, including their price targets as
well as support and resistance levels.
AirAsia: Support broken. We previously
highlighted the possibility of a return
of buying interest at the 5-month
support line of RM3.55. However, this
did not happen and the violation
of the support level has led to the
deterioration of its technical
picture. This is in line with the declining 50-day MAV line, which has been
falling for 4 months. The most oversold daily RSI since the rebound of Sept
2011 gives a glimmer of hope for a possible short-term bottom. But a return of
upside bias can only be expected if the stock closes above the broken RM3.55,
right where the 200-day MAV line is located, with a break of the 9-month
downtrend line as the confirmation. Such a move will also avert a “Death Cross”,
where the 50-day MAV line crosses below the 200-day MAV line, which is a
longer-term bearish sign. Otherwise, the downside bias will stay as long as the
stock fails to get back above RM3.55, and support is expected at RM3.10
and the Sept-low of RM2.70. A violation
of RM2.70 will likely see the longer term trend move downwards.
Time dotCom:
Support needs to hold. The 5-month rally that peaked in February appears to
have hit a snag. This was first signaled by the failure of the second attempt
to break the RM0.78 resistance level, the gap of June 2011. The easing of the upward
momentum is clearly shown in the daily RSI, where a “Negative Divergence” has
formed. Therefore, the 3-month support level of RM0.68 has to hold to keep the
current rally intact. This will be in tandem with the most oversold RSI since Sept
2011, with a close above the early March-low of RM0.72 increasing the
possibility that the RM0.78 resistance will be broken. However, a close below
RM0.68 for two consecutive days would likely see an extended correction of the
5-month rally. Support is expected at the Fibonacci retracement levels of the
rally at RM0.60 and RM0.55. A close below RM0.55 will significantly diminish
the chances of an upward continuation
WTK Holding: At
7-month high. This is one of the few stocks that are breaking higher lately.
Its upward march has been sluggish since the Sept 2011 low, but an upward bias
is present throughout the past few
months as seen from the higher lows in Dec 2011 and March. The stock’s slow and
steady upward move led to the violation of the 5-month resistance last Tuesday.
It has not surged in a dramatic fashion
but a close back above RM1.50 should see it moving higher. A “Golden Cross”,
where the 50-day MAV line crosses above the 200-day MAV line (which is usually
a positive longer-term indicator), may also happen and help reinforce the
upward bias. Thus, a purchase can be made on another close above RM1.50 with a close
below the February-low of RM1.33 as
a stop. An aggressive trade may even
exit on a close back below RM1.50. A measured
move based on the Dec-Feb rally could see the stock close the August gap of
RM1.75. However, the upward bias could be nullified if the stop is triggered,
after which expect the stock to trade sideways instead.
Poh Kong: Triangle correction. The rebound in the broader market in Sept
2011 brought this stock back to life.
The 5-month rally that peaked in February enabled the stock to print a 3-year
high. It is also natural for a strong move to make way for a correction, which
is now entering into its third month. Nevertheless, the upward move is still
intact, judging from the rising 50-day MAV line but a slight negative bias is
seen from the formation of the “Descending Triangle” pattern. Nonetheless,
weakness is only confirmed if the support of RM0.54 is violated. Thus, an
upward continuation is expected as long as the support holds, and a purchase can be made above the support
level with a stop loss on close below it. A measured move target based
on the 5-mopnth rally could see the stock at RM0.76, provided that the recent
high of RM0.60 is violated. Expect the price to trade lower should the stop
loss be triggered and strong
support lies at RM0.49, the 62% retracement
of the Oct-Feb rally.
Source: OSK188
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