The stock’s RM0.14 gain on 7 Dec 2012 was the result of its share price breaking out from Can-One’s nearly six-month-old downtrend line. Since then, the stock has been in a consolidation mode, fluctuating between the RM2.31 and RM2.50 levels. The stock did indeed make two attempts to crack above the RM2.50 level during its consolidation phase, but had failed on both occasions.
Anyhow, since the nearly six-month-old downtrend has been violated, we view the current consolidation as a good opportunity to accumulate Can-One shares, as the stock is likely to eventually close above RM2.50 and extend the rebound that started on 7 Dec 2012.
We are eyeing the RM2.64 level as the immediate upside target, followed by RM2.91, both representing the stock’s resistance levels should the RM2.50 level be taken out. Nevertheless, traders may want to cut losses should the RM2.31 base level be violated, since its violation would mean that the stock will enter a lengthier consolidation phase.
Below the RM2.31 level, look for immediate support at the RM2.24-RM2.26 area, followed by the RM2.12 level.
Anyhow, since the nearly six-month-old downtrend has been violated, we view the current consolidation as a good opportunity to accumulate Can-One shares, as the stock is likely to eventually close above RM2.50 and extend the rebound that started on 7 Dec 2012.
We are eyeing the RM2.64 level as the immediate upside target, followed by RM2.91, both representing the stock’s resistance levels should the RM2.50 level be taken out. Nevertheless, traders may want to cut losses should the RM2.31 base level be violated, since its violation would mean that the stock will enter a lengthier consolidation phase.
Below the RM2.31 level, look for immediate support at the RM2.24-RM2.26 area, followed by the RM2.12 level.
Source: OSK
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