DAILY TRADING STOCKS: Alliance Financial Group, Tebrau Teguh

AFG’s daily chart

AFG’s  share price  has to close above the psychological level to keep the rally intact. The stock has been consolidating sideways below RM3.90 thorought the month of March, after the strong rally of Sept-Jan.  The sideways move  seems to have an upward bias, judging from the higher lows and rising 100-day MAV line. Thus, an upward continuation is expected and the consolidation  phase may have ended yesterday after the higher close with a gap up. Nonetheless, the required confirmation of a close above RM4.00 is not fortcoming and a position can be initiated if this level is violated convincingly. A close below  the  February-low of RM3.70 can be employed as  a  stop loss, while an aggressive trade may opt for yesterday’s gap low of RM3.90 instead. The price target is RM4.30, based on the sideways move, and a measured move based on  the Sept-Jan rally may even see it  go  as high as RM4.70.  A failure to close  above RM4.00 in the coming days could potentially mean a false breakout, with a close below RM3.70 confirming the price weakness. A close below RM3.70 will also see the violation of the 100-day MAV line and may even signal the end of the rally since June 2011.

Tebrau’s daily chart

Tebrau’s share price  should trade higher  if it  holds above the support level. The stock was highlighted in early March for its likelihood of finding a bottom  at RM0.85 and surging ahead. The anticipated  move higher did not happen as the stock found resistance right at RM0.90. Weakness was confirmed when the stock closed below the stop-loss  level  of RM0.85.  However,  the recent price action suggests that buying support may have returned at the RM0.77 level. The decline failed to close the gap of 2 Feb, and the positive “Hammer” and “Dragonfly Doji” candles formed instead.  Note that  RM0.77 was also the high in Nov 2011 and retraces 50% of the Sep 2011-Feb 2012 rally. The rising 100-day MAV line is supportive too. Thus, a higher low may be formed and a purchase can be made on close above the “Dragonfly Doji” high of RM0.80.  An aggressive trade may enter now  in anticipation of higher prices, while a close below RM0.77 can be employed as  the stop loss.  A measured move based on  the  Jan-Feb rally could see the stock testing RM1.12, provided that the 2½ -year high of RM1.00 is broken. Moreover, a strong move could even see a test of  the 2008-high of RM1.40.  Meanwhile, a close below RM0.77 will invalidate the trade, and look for it to trade lower instead. Strong support is expected at the Dec 2011-low of RM0.69.

Source: OSK188