DAILY TRADING STOCKS: Ecofirst Consolidated, Three-A Resources

Ecofirst’s daily chart

Ecofirst may trade higher if it can stay above the psychological support level. The stock has been on a correction  for almost 3 months, after spiking just below RM0.30 in early February. It seems that selling pressure has eased considerably in  the  past month  as the price moved lower rather reluctantly. This raises the possibility that the stock will find support above  the psychological  RM0.20 level, thus keeping the rally since Sept 2011 intact as the stock is still seeing a series of higher lows. However, buying support is only confirmed if it closes above last week’s high of RM0.215 and purchases can be made if  this happens with a stop loss on close below RM0.20. A conservative trade may wait until a close above the 5-week high of RM0.23 before entering. Look for a retest of the recent high of RM0.30 should the buy signal be triggered, provided that the RM0.25 resistance is violated convincingly first. The upside bias is erased if the stop loss is triggered and this should lead to an extended correction. Strong support is at  the  December-low of RM0.185, a violation of which spells the end of the rally.

3A’s daily chart

3A’s  share price  may  trade higher after the firmer move yesterday.  There is no doubt that the stock is trading lower since peaking in early 2010. However, this may end as the stock is forming a gentle uptrend in the past 7 months, printing a series of higher lows in the process. A new up-leg likely started yesterday, when it closed above last week’s high of RM1.23. It closed on a high volume “Long White” candle, which suggests firm buying interest. It even closed above the RM1.27  resistance level.  Thus,  an  upward continuation is expected and purchases can be made above RM1.30, with a close below RM1.27 as  the  stop loss.  The price target is RM1.55, which will regain 62% of the 2011 decline, provided that the strong resistance of RM1.40 is violated. The trade may not work out should it close below RM1.27, but do not discount the possibility of a second breakout. Support  lies at RM1.25, where the trend line is.

Source: OSK188