Following a sharp 22 sen spike at the end of July, Latexx Partners' (Latexx)
share price has been in consolidation mode for the past fortnight. The price
subsequently broke out of the congestion
zone yesterday, confirming the Bullish Pennant chart pattern amid increased volume.
The bullish setting is further supported by the rising MACD, RSI and
Stochastics indicators with the 20-, 50- and 100-day SMAs all firmly positive.
Traders looking to take advantage of this move should have the RM1.90/92
measurement objective in mind, with a corresponding stop loss placed just below
the RM1.70 support level.
On the weekly chart, Latexx appears to have broken out of
its long term downtrend line. Prices have also swung above the 20- and 50-day
SMAs along the way. We believe this is likely a precursor to more upside ahead
though the share price is likely to face strong resistance between RM1.90-
RM2.08. Nonetheless, the indicators are trending higher with the RSI still a
fair distance below the overbought levels. Hence, aggressive risk takers could
start to nibble now and peg initial target at RM2.08. A bigger upside potential
will only exist if and when the price convincingly penetrate the
RM2.08-resistance and complete a "Double Bottom" pattern with a
measurement objective of RM2.60.
Source: Kenanga
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