UOA Development’s (“UOA”) share price has been trending
upwards since it made
its lows in
October. With the
amount of news
flow surrounding the stock, its price action has been relatively
volatile in recent months, completing large price swings within a 2-3 week cycles.
For instance, UOA saw its share price spiked up 14 sen yesterday after a local
research house raised its earnings forecasts for the stock amid
stronger-than-expected new sales.
Technically speaking, the share price has effectively broken
above its congestion zone at RM1.66. The strong move yesterday saw an upward
breach of the Bollinger Bands, resulting
in an outward expansion of the band coupled with high volumes. The RSI has also
hooked up without entering the overbought level, possibly indicating a further
upside potential. On the weekly chart, UOA has managed to close above the
channel resistance (RM1.66) formed since the start of the year. Subsequent to
this breakout, this resistance level has now turned support with an upside
measurement target of 22 sen to RM1.88. With the impressive move recorded
yesterday, we do not rule out the possibility of the share price returning to
this new found support level in a typical return move after a strong breakout.
A return to or near this level would offer a second chance to buy into the
stock.
Source: Kenanga
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