Monday, 2 April 2012

HOT STOCK: Winsun Technologies Bhd - In Consolidation Mode


On 20 Feb 2012, we advised traders to accumulate Winsun’s shares after the stock violated the RM0.105-RM0.13 consolidation range. Subsequently on 5 March 2012, its share price  had climbed to as high as RM0.20, which is just a whisker away from our RM0.21 target. Nevertheless, the stock violated its steep uptrend the next day, which was then followed by a sharp retracement. Coincidentally, Winsun’s share price has started to consolidate at around the previous consolidation  range  of RM0.105-RM0.13  and this presents another trading opportunity. Traders are advised to accumulate shares at prices within the current consolidation range of RM0.11-RM0.135. The upside target is pegged at the RM0.18 level this time, with the cut-loss level at the RM0.11 support floor.

On 20 Feb 2012, we advised traders to accumulate Winsun’s shares after the stock violated the  RM0.105–RM0.13 consolidation range. Its share price had appreciated as expected, following the breakout and eventually reached as high as RM0.20, which is just shy of our RM0.21 price target.

Nevertheless, the steep uptrend line was quickly violated on 6 March 2012 and this had caused its share price  to retrace sharply. Meanwhile, Winsun’s share price has now started to stabilize at above the 61.8% Fibonacci retracement point of the Jan-Feb sharp rally.  For the last three weeks, the stock has been trending sideways  within the  range of RM0.11–RM0.135.  As mentioned earlier, the current consolidation range  coincides with  the previous  consolidation range of RM0.105-RM0.13.  

As the stock has started to stabilize right above the 61.8% Fibonacci retracement level and an obvious consolidation zone could also be identified,  we see  another trading opportunity  being presented. Hence, we advise traders to accumulate shares at prices between RM0.11 and RM0.135. This time, we are eyeing the RM0.18 level as the upside target, but advise traders to cut losses should the RM0.11 support floor be taken out.

The RM0.135 resistance line of the consolidation phase is now the immediate resistance. The RM0.15 level is another level to be challenged, prior to reaching our RM0.18 price target. To the downside, look for RM0.11 as the immediate crucial support. The next support lies at the RM0.10 psychological mark.

Source: OSK188

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