KPJ’s one-year old uptrend began to lose momentum when the stock started to trade below the uptrend line since Sept 2012. An obvious downtrend line which extends from the RM6.50 historic high has also been constructed.
After coming under pressure for a few months, KPJ finally arrived at the 200-day MAV line on 27 Nov and was trying to maintain its position above the line for another 11 sessions. Its multiple attempts to bounce off the 200-day MAV line in the 11 sessions basically imply the significance of this support line to the stock.
Nevertheless, the 200-day MAV line was finally violated last Friday. It also violated another crucial support floor of RM5.77 during the process. Judging by the momentum of the sell-down and the fact that the stock took out two crucial support levels at the same time, there is a possibility that the its share price may retrace towards the next strong level of RM5.33 or even the RM5.00 psychological mark. Both of these levels represent our downside price targets.
Following last Friday’s breakdown, KPJ’s near-term technical outlook has shifted to become bearish. Its share price is expected to continue coming down until the downtrend line shown in the above chart is violated.
To the upside, look for the 200-day MAV line or the RM5.82 level as the immediate resistance. The next resistance is situated at RM6.00.
After coming under pressure for a few months, KPJ finally arrived at the 200-day MAV line on 27 Nov and was trying to maintain its position above the line for another 11 sessions. Its multiple attempts to bounce off the 200-day MAV line in the 11 sessions basically imply the significance of this support line to the stock.
Nevertheless, the 200-day MAV line was finally violated last Friday. It also violated another crucial support floor of RM5.77 during the process. Judging by the momentum of the sell-down and the fact that the stock took out two crucial support levels at the same time, there is a possibility that the its share price may retrace towards the next strong level of RM5.33 or even the RM5.00 psychological mark. Both of these levels represent our downside price targets.
Following last Friday’s breakdown, KPJ’s near-term technical outlook has shifted to become bearish. Its share price is expected to continue coming down until the downtrend line shown in the above chart is violated.
To the upside, look for the 200-day MAV line or the RM5.82 level as the immediate resistance. The next resistance is situated at RM6.00.
Source: OSK
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