Business

Saturday March 7, 2009

Eye on Stock

By K.M. Lee


LINGKARAN Trans Kota Holdings Bhd (Litrak) recovered significantly on continuous bargain-hunting nibbling over the past several months, which witnessed its shares climbing from a “double-bottom” formation of RM1.56 on Oct 28, last year to a seven-month high of RM2.13 during intra-day session yesterday.

This counter appears already on the recovery path, as prices had established a short-term ascending channel and most importantly, they are treading above all the moving averages on our radar screen, namely the 14-day simple moving average (SMA), 21-day SMA, 100-day SMA and the 200-day SMA.

According to the daily bar chart, there may be more scaling in the pipeline, but volume needs to expand accordingly to keep the momentum going.

The oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index and the 14-day relative strength index were on the upward trend. Despite reaching the overbought area, they show no sign of weakening yet.

Meanwhile, the daily moving average convergence/divergence histogram continued to expand positively against the signal line to stay bullish. It triggered a buy late last month after a brief consolidation.

Technically, the prevailing trend is constructive, implying any pullback owing to overbought reason is seen as an opportunity to accumulate more.

Important support is pegged at the 21-day SMA of RM1.96, also the trailing stop-loss exit.

Initial resistance is envisaged at the RM2.20 level and the next upper strong barrier is resting at the RM2.40 mark. – By K.M. Lee

  • The comments above do not represent a recommendation to buy or sell.


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