RHB Capital (“RHBCAP”) broke below its upward slopping trend
lie in August, effectively signaling the end of the uptrend. The share price subsequently
formed a short term rounding top and violated the RM7.08 low with a forceful
breakdown. The 20-, 50-, and 100-day SMAs are all negative, while the MACD has
just crossed below the signal line on the back of an expanding MACD histogram.
The Stochastics indicator has also dipped downwards, confirming the down-cycle.
With the indicators suggesting an increase in selling momentum, the technical picture
has turned increasingly grim. Downside support can be found at RM6.95 first and
RM6.80 next. However, should these support levels be violated, RHBCAP may
potentially test the low of October 2012 of RM6.35.
On the weekly chart, RHBCAP's downtrend extends as far back as June 2011. Having failed to close
above the RM7.60 resistance level two months back, the share price retreated
further before breaking below the 21-week Bollinger Band on Monday. The
technical picture has deteriorated significantly as all three indicators, the
MACD, Stochastics and RSI have dipped downwards suggesting further weakness to
the abovementioned support levels.
Source: Kenanga
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