Oldtown experienced a major breakout last Friday. Prior
to this, the stock had been
consolidating at prices between RM1.20 and RM1.35 since the beginning
of the year. Hence, the breakout basically signals the end of the consolidation
phase. Nevertheless, because of the strong 9% gains recorded, there is a
possibility that the stock may consolidate these gains first before climbing
higher again. We advise traders to accumulate shares between RM1.35 and the
current level. Considering the significance of the breakout, we expect the
stock to achieve another upside of 15% or so and therefore, we peg RM1.60 as
the immediate upside target. Consider cutting losses if the price violates the
RM1.35 support floor.
Prior to last Friday, Oldtown had been consolidating between
RM1.20 and RM1.35, after rallying in the
period between Sept 2011 and Jan 2012.
Last Friday’s price action saw the violation of the consolidation zone
and basically, this signals the end of its consolidation phase.
The breakout, which was accompanied by strong volume, looks
convincing too. Hence, we advise traders to accumulate shares at prices
between RM1.35 and the current level. Nevertheless, do expect its share price to take a breather considering last Friday’s
9% gains are rather strong. We are anticipating further gains of about 15% from
the current level, judging from the momentum of the breakout and therefore, we
are eyeing the RM1.60 level as the upside target. Traders would want to
consider cutting losses should its share price retrace back below the RM1.35
level.
At below the RM1.35
level, look for the RM1.25 level as the next support, followed by the RM1.20
level. To the upside, traders can expect
resistance at the RM1.50 psychological level.
Source: OSK188
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