CMSB is expected to extend the rally that started in 2009 as the stock consolidates above the broken 10-year resistance at RM3.00. The stock is now on a clear long-term uptrend, with the series of higher lows charted since 2009 still intact. The 100-week MAV line, which turned into a support early this year, is also trending upward. CMSB’s uptrend was confirmed in July when the stock broke above the 10-year resistance of RM3.00.
The stock finally consolidated after hitting the round figure of RM3.50. In fact, the shallow correction of the July-Sept rally, i.e. the two-month sideways move above RM3.20, is testament to the strength of the uptrend. Thus, a position can be initiated above RM3.20 on expectations of the rally resuming; otherwise a position above RM3.50 is a more conservative stance. A close below the psychological RM3.00 can be employed as stop-loss, while a more aggressive trader may exit on a close below RM3.20.
The rally will continue should the stock manage to close above the recent high of RM3.50. The price target is the prior high of RM5.00, with selling expected at RM3.70 and RM4.30. However, a close below RM3.00 may lead to a false breakout of the RM3.00 level, with supports anticipated at RM2.75, RM2.55 and RM2.35. A violation of all three levels would signal strong selling pressure and may even jeopardise the stock’s rally.
Source: OSK
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