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SUPERMAX Corp Bhd looks to have halted the correction that began on Nov 22 following the share price hitting a recent high of RM4.10. 

The stock retreated to a supporting level of RM3.42 before it shifted gears and returned to an upwards trajectory.

At Wednesdy's open, the stock gapped up and headed higher to cross the 100-day simple moving average (SMA) and an intra-day high of RM3.72.

The return to a rally will end prematurely should the share price return below the 100-day SMA. A sustained crossing, however, will mark a bullish return for the counter.

So long as the buying interest continues, the share price looks headed for the next resistance at RM4.01, and above that the recent high of RM4.10.

Based on the daily price chart, the counter is yet to return to a positive trend. The key SMAs remain in bearish positions, with the 50-day SMA having crossed under the 200-day SMA. 

Looking at the technical indicators, the daily moving average convergence/divergence line remains below the signal line but is on the verge of a positive crossing.

The slow-stochastic momentum index. however, paints a more optimistic picture. It bounced off the oversold line to angle sharply upwards at 57 points, suggesting more gains over the immediate term.

The 14-day relative strength index meanwhile has also risen past the neutral area to 59 points and is growing in momentum.

Falling momentum will take the share price back to the support at RM3.42. 

Lying under the support is the 200-day SMA at RM3.39 and 50-day SMA at RM3.34. A breach of the two lines will be a negative development for the stock, with the next support pegged to RM3.15.

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

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