Saturday August 18, 2012
Eye on stock
MWE Holdings Bhd sustained the upward thrust amid follow-through buying momentum, sending the shares to a high of RM1.70, the best level since April 2000.
Based on the daily chart, the prevailing trend is firmly bullish. With encouraging trading volumes continuing to support prices, it appears this stock still has more upside going forward.
Hence, should there be any pullback due to overbought reason, it is likely to be a temporary, seen as giving investors, especially those who are already into it, an opportunity to accumulate more.
Apparently, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index surged deeper into the overbought area, but they show no signs of weakening as yet.
Likewise, the 14-day relative strength index improved rapidly from the mid-range to settle at the 83-point level.
Meanwhile, the daily moving average convergence/divergence histogram continued to expand positively against the daily trigger line to retain the bullish note. It had issued a buy on Thursday.
Technically, the indicators are painting a pretty promising pictogram, implying more upside potential in the pipeline.
If prices can clear the relatively strong RM1.85-RM1.90 resistance band, the next upper target to look for would be the RM2.14 or the RM2.35 level.
As for the downside, the runaway gap of RM1.66 and the RM1.64 line will now act as the immediate support floors. - By K.M. LEE
● The comments above do not represent a recommendation to buy or sell.