In our previous analysis on DiGi.Com in early Nov, we mentioned that the stock’s bullish technical landscape will remain firmly solid as long as it maintains its posture at above the rising 30-week MAV line, which it has never violated since the beginning of the latest bull market in 2009.
To re-cap, DiGi.Com was trending along the 30-week MAV line for the entire year of 2010 to early 2011. The stock also gained obvious support at the MAV line in the second half of 2011 and again, in May-June this year.
The stock tested the 30-week MAV line once again two weeks ago and it is already showing early signs of rebounding off the line. This time, the rebound is accompanied by the highest volume recorded since the mid-2009, indicating a strong accumulation of shares.
We recommend the traders to accumulate DiGi.Com’s shares at above the 30-week MAV line which now lies at the RM4.71 level. There is a possibility that the stock would continue rebounding from here and eventually hit a new historic peak. However, traders would want to cut losses should the stock close below this line in any particular week, as the violation would mark a serious breakdown.
From the current level, now look for an immediate resistance at the RM5.00 psychological mark followed by the RM5.57 historic high. The 30-week MAV line is now the immediate critical support. Should it be violated, which we think is unlikely given the high volume, look for the next support at the RM3.82 floor.
To re-cap, DiGi.Com was trending along the 30-week MAV line for the entire year of 2010 to early 2011. The stock also gained obvious support at the MAV line in the second half of 2011 and again, in May-June this year.
The stock tested the 30-week MAV line once again two weeks ago and it is already showing early signs of rebounding off the line. This time, the rebound is accompanied by the highest volume recorded since the mid-2009, indicating a strong accumulation of shares.
We recommend the traders to accumulate DiGi.Com’s shares at above the 30-week MAV line which now lies at the RM4.71 level. There is a possibility that the stock would continue rebounding from here and eventually hit a new historic peak. However, traders would want to cut losses should the stock close below this line in any particular week, as the violation would mark a serious breakdown.
From the current level, now look for an immediate resistance at the RM5.00 psychological mark followed by the RM5.57 historic high. The 30-week MAV line is now the immediate critical support. Should it be violated, which we think is unlikely given the high volume, look for the next support at the RM3.82 floor.
Source: OSK
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