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Eye on stock: Kossan

TheStar Sat, May 25, 2019 10:00am - 4 months ago


 

KOSSAN Rubber Industries Bhd (code: 7153) extended its rally over the past week, putting itself in position to test the overhead resistance at RM4.

Higher up is the 200-day simple moving average (SMAs) at RM4.05, which serves as a critical hurdle in the continuation of the rally.

However, due to yesterday’s negative market close, there is a possibility the stock may be entering a profit-taking phase.

A consolidation at this stage would be seen as healthy, following which the rally may resume on renewed buying interest to re-test and possibly breach the overhead hurdle.

In the event of a successful breach of the 200-day SMA, there could be a return to RM4.20, the high point of the year thus far.

Kossan’s return to positive momentum began in the final week of March this year, which started a short-term trend line on the daily price chart. The rebound serves to retrace the steep losses seen in February and March this year, which saw the stock lose about 18% of its value.

Looking at the moving averages, the 14- and 21-day SMAs are offering lift to the current rally and currently coincide with the share price’s immediate support at RM3.72.

While the longer-term SMA lines remain at negative formations, the 50-day SMA can be seen angling higher as it targets a return above the 100-day SMA.

The technical indicators are also suggesting a consolidation phase as the slow-stochastic momentum index fell lower yesterday to 69 points.

The 14-day relative strength index has retreated from overbought conditions at 69 points as the index attempts to neutralise.

Nevertheless, the daily moving average convergence/divergence (MACD) line continues to gain ground over the signal line. With yesterday’s performance, the MACD has perked up further, suggesting continued momentum in the ongoing uptrend.

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

   

Higher up is the 200-day simple moving average (SMAs) at RM4.05, which serves as a critical hurdle in the continuation of the rally.

However, due to yesterday’s negative market close, there is a possibility the stock may be entering a profit-taking phase.

A consolidation at this stage would be seen as healthy, following which the rally may resume on renewed buying interest to re-test and possibly breach the overhead hurdle.

In the event of a successful breach of the 200-day SMA, there could be a return to RM4.20, the high point of the year thus far.

Kossan’s return to positive momentum began in the final week of March this year, which started a short-term trend line on the daily price chart. The rebound serves to retrace the steep losses seen in February and March this year, which saw the stock lose about 18% of its value.

Looking at the moving averages, the 14- and 21-day SMAs are offering lift to the current rally and currently coincide with the share price’s immediate support at RM3.72.

While the longer-term SMA lines remain at negative formations, the 50-day SMA can be seen angling higher as it targets a return above the 100-day SMA.

The technical indicators are also suggesting a consolidation phase as the slow-stochastic momentum index fell lower yesterday to 69 points.

The 14-day relative strength index has retreated from overbought conditions at 69 points as the index attempts to neutralise.

Nevertheless, the daily moving average convergence/divergence (MACD) line continues to gain ground over the signal line. With yesterday’s performance, the MACD has perked up further, suggesting continued momentum in the ongoing uptrend.

The comments above do not represent a \trecommendation to buy or sell.








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KOSSAN 4.210

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