Having constructed a strong floor at the RM1.17 level,
Johore Tin’s upward momentum is picking up this week. This type of technical
development typically signals an extension of the previous trend. We advise
traders to accumulate its shares between the current level and yesterday’s
opening point of RM1.28. Its RM1.72 historic peak is pegged as the upside target.
Traders should consider cutting loss should the stock violate the RM1.17
level.
Johore Tin experienced a sharp run-up in its share price during the Feb-March 2012
period. The stock then started consolidating sideways within the RM1.17-RM1.34
range after hitting the RM1.34 peak. However, its upward momentum has started
to pick up since Monday, which saw the share price rebounding strongly off the
RM1.17 level, and the stock closed at RM1.37 yesterday. Judging
from the strong rebound in its
trading volume yesterday, it seems
that the stock’s consolidation phase for the Feb-March 2012 rally is already
over.
Hence, we advise traders to accumulate shares between the
current level and the RM1.17 level. We are eyeing its RM1.72 historic high as
the upside target. The RM1.17 strong support floor would be the obvious
cut-loss level as a break below it would trigger a major breakdown.
Prior to reaching our RM1.72 price target, an immediate
resistance can be seen at the RM1.37 level. To the downside, look for an
immediate support at the RM1.28 level, followed by the very strong RM1.17
support level. The near-term technical outlook of Johore Tin is now aligned
with the bullish bias and the daily RSI
at the 74.6 pt-level. Considering the RSI is still below the 88-pt peak reached
in March, there is still room for further upside extension.
Source: OSK188
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