Supporting the FBMKLCI on Wednesday were the strong gains
seen in heavyweights CIMB and Digi, each contributing 1.71 and 1.63 points respectively
to the benchmark index. On the daily chart, Digi commenced its rally back in
May and has since formed an upward sloping trend line. The share price
subsequently corrected towards RM4.80 before consolidating sideways for around
two weeks. On Wednesday, however, Digi managed a breakout from the congestion
zone amid high traded volumes. The Stochastics indicator has hooked upward,
indicating the start of a short term up-cycle, while the MACD histogram has
also moved towards the zero line, which indicates a shift in momentum from
sellers to buyers.
On the weekly chart, Digi confirmed the bullish
"Morning Doji" candlestick formation upon finding support at the
76.4% Fibonacci Retracement Level. Its 5-month uptrend looks to be intact, and
should the bullish reversal pattern prove real, Digi's share price may look to
retest the RM5.04 high next. Further resistance beyond that level can be found
at RM5.33 while the downside support remains at RM4.75. As for the indicators,
the MACD and Stochastics remain positive despite the RSI hovering within
overbought levels.
Source: Kenanga
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