Mudajaya's share price has been trading sideways since late
April, forming a trading channel in the process. Being news driven to a large extent,
the share price ran up from its recent lows of RM2.50 to retest the upper trend
resistance of RM2.80 yesterday before bouncing off with equal tenacity during
the day. At these levels, we expect some degrees of profit taking amid the
conventional ("technical") wisdom that the share price may return to
the support line at RM2.55. On the flipside, the MACD has just managed a
positive crossover with the signal line, hinting that the upward momentum may
continue. Should a breakout occur, further gains may be expected towards the measurement
objective of RM3.15.
The share price is also in the midst of retesting the long
term resistance line on the weekly chart. The immediate trend remains downward although an upside breakout
will serve as a significant game changer
(with a huge upside potential should the breakout occur). At this point, the
Stochastic indicator has just emerged from oversold levels and is now hooking
upwards, highlighting this possibility. We reckon that from a technical
standpoint, Mudajaya may be a stock to watch over the next few days as a move
in either direction will not be subtle.
Source: Kenanga
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