DAILY TRADING STOCKS: Axiata, AMMB

Axiata’s daily chart

Axiata’s  share price will move higher if it breaks above its resistance level. The stock was highlighted in early February for its likelihood of finding bottom and it has moved favourably since. After hitting an intraday high of RM5.20, it then spent the whole of March consolidation the gains.  An upward bias, nonetheless, remained throughout the consolidation, as shown by the short term uptrend-line. The 50-day MAV line is similarly rising too. Strong buying intent was seen last Friday, where it closed right at RM5.20 on a “Long White” candle, possibly marking the end of the consolidation. As such, a close above RM5.20 today should confirm the continuation of the uptrend and purchases can be made if this happens. A close below the psychological RM5.00, just below  the March low can be taken as the stop loss, while an aggressive trade may opt for a close below last Friday’s low of RM5.14 instead. The price target remains at RM5.70 judging from the width of consolidation in  the past 8 months, while a strong move could see the stock testing RM6.50 – a measured move based on the 2010-2011 rally.  The stock may trade lower if the stop loss is triggered and support lies at RM4.65, the violation of which could see the end of the 3-year rally.

AMMB’s daily chart

AMMB’s  share price  should trade higher  if it breaks above the short-term resistance level.  The stock has been trending lower since peaking in early 2011 but the broad market rebound since Sept 2011 also brought a change in trend for the stock. It printed a 6-month high in  early March and thereafter, traded sideways and consolidated the gains. An upward bias was present throughout the consolidation, as illustrated by the short-term uptrend-line and rising 50-day MAV line.  The correction was shallow too,  retracing less than 38% of the Dec 2011-March 2012 rally. The consolidation may have ended yesterday after closing above  the  RM6.30 resistance on a “Long White” candle. Sentiment is clearly upbeat as the candle was preceded by a gap. As such, positions can be initiated on another close above RM6.30, which will confirm the breakout. A close below last week’s low of RM6.16 can be taken as a stop loss. A measured move based on the 3-month rally may see the test of  the  July-high of RM6.70, although resistance is also expected at  the  August-high of RM6.55.  The trade may not work out if the stock closes below RM6.16, but expect strong support at the psychological RM6.00.

Source: OSK188