Friday 13 April 2012

HOT STOCK: Johore Tin Bhd - Momentum Picks Up


Having constructed a strong floor at the RM1.17 level, Johore Tin’s upward momentum is picking up this week. This type of technical development typically signals an extension of the previous trend. We advise traders to accumulate its shares between the current level and yesterday’s opening point of RM1.28. Its RM1.72 historic peak is pegged as the upside target. Traders should consider cutting loss should the stock violate the RM1.17 level. 

Johore Tin experienced a sharp run-up  in its share price during the Feb-March 2012 period. The stock then started consolidating sideways within the RM1.17-RM1.34 range after hitting the RM1.34 peak. However, its upward momentum has started to pick up since Monday, which saw the share price rebounding strongly off the RM1.17 level, and the stock closed at RM1.37 yesterday.  Judging  from the strong rebound in its  trading  volume yesterday, it seems that the stock’s consolidation phase for the Feb-March 2012 rally is already over.

Hence, we advise traders to accumulate shares between the current level and the RM1.17 level. We are eyeing its RM1.72 historic high as the upside target. The RM1.17 strong support floor would be the obvious cut-loss level as a break below it would trigger a major breakdown.

Prior to reaching our RM1.72 price target, an immediate resistance can be seen at the RM1.37 level. To the downside, look for an immediate support at the RM1.28 level, followed by the very strong RM1.17 support level. The near-term technical outlook of Johore Tin is now aligned with  the bullish bias and the daily RSI at the 74.6 pt-level. Considering the RSI is still below the 88-pt peak reached in March, there is still room for further upside extension. 

Source: OSK188 

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