DAILY TRADING STOCKS: Time dotCom, Redtone International

Time dotCom’s daily chart

Time dotCom could be making a  short-term bottom if it holds above the support level.  The stock rallied sharply in 4Q  last year and spent the past 5 months consolidating the gains. An upward bias has lingered throughout the consolidation phase as it remained above the 200-day MAV line. The correction was shallow too, as the low of RM0.67 retraced less than 38% of the Sept-Dec rally. In fact, strong support exists at RM0.67 which coincided with the daily RSI being at an oversold level (also at its lowest since Sept 2011) recently.  But a return of buying  will only  be  confirmed on a close above  the  April high of RM0.715.  Purchases can be made if this happens  with  a close below RM0.67  employed as a stop loss. Resistance is at RM0.775 as a successful violation could see a test of the 2011-high of RM0.95.  A failure to close above RM0.715 increases the chances of a sudden selloff, which is to be confirmed by a close below RM0.67. Support is expected at RM0.60 and then RM0.55, with both surprisingly being Fibonacci levels of the AprilSept decline and Sept-Dec rally. It has to find support at RM0.54 to keep the rally from Sept 2011 alive.

Redtone’s daily chart

Redtone’s  share price  may  trade higher after the firmer move yesterday. The stock has reached our target of RM0.23, 3 months after we highlighted the  possibility of an impending pullback following the failed test of  the  RM0.35 resistance.  Buying support may  have returned after the decline was halted at RM0.23, suggesting that the stock is trading within a huge sideways band of RM0.23-RM0.35. The higher close and the highest volume in more than a month points to the return of buying interest. But this will only  be  confirmed  if the stock closes above  the  April-high of RM0.25.  Positions can be initiated if  this happens with a stop loss on close below RM0.23. The price target is RM0.30, which will claw back 50% of the 3-month decline. A strong move may even see the test of RM0.35. However, a failure to close above RM0.25 followed by a close below RM0.23 should see  the stock trading lower – and perhaps, spell the end of the rally.  Support  is expected at  the psychological RM0.20 and Aug/Sept 2011-low of RM0.15.

Source: OSK188