Saturday September 22, 2012
Eye on Stock
ANCOM Bhd established an all-time low of 29 sen on Oct 3, last year after a long bearish move. Shortly after, prices rebounded slightly from the bottom to trade range-bound, seen as base building process and it lasted for 11 months before bouncing off in the wake of fresh buying interest.
This stock recovered to a high of 50 sen sen during intra-day session, the best since February 2011, supported by encouraging trading volumes yesterday. Based on the daily chart, Ancom had penetrated the upper horizontal line of the rectangular box in mid-week. Theoretically, the positive breakout offers investors a ray of hope that the fate of this stock has turned around and going forward, it can only get better.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were fast reaching the overbought territory but remained in buy mode.
Likewise, the 14-day relative strength index improved rapidly from a reading of 43 to close at the 90 points level yesterday.
In addition, the daily moving average convergence/divergence histogram expanded sharply and positively against the daily signal line to keep the bullish note. It had issued a buy on Sept 7.
Technically, indicators are promising, implying more upside potential in the pipeline. Hence, any pullback in the short-term owing to overbought reason is viewed as opportunity for investors to accumulate more. Resistance can be expected at the 55 sen barrier. A push above the next overhead hurdle of 62 sen may propel prices up to challenge the 80 sen to 80.5 sen stiff resistance band. As for the downside, the recent bullish breakout point of 42 sen would act as the trailing stop-loss exit. - By K.M. Lee
The comments above do not represent a recommendation to buy or sell.