Eye on stock Saturday, 29 November 2014 By: K.M. LEE
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Eye on stock Saturday, 29 November 2014 By: K.M. LEE
Eye on stock
Saturday, 29 November 2014By: K.M. LEE
DENKO Industrial Corp Bhd peaked out temporarily at a near seven-year high of 54 sen on Sept 5, 2011 after a strong rally.
In the wake of apparent profit-taking, prices succumbed to pressure to retreat, pulling back to a low of 23.5 sen in mid-May the following year in an eight-month correction phase.
Thereafter, prices turned range-bound on light bargain-hunting activity alternating with mild liquidation, undergoing a period of consolidation.
Based on the daily chart, Denko was trapped inside the existing trading box for quite a long time, interpreted as a base-building process. With prices currently flirting near the base, there is a high possibility they may firm in the short term.
Heavy barrier is pegged at the 35-36.5 sen range, of which a decisive breakthrough would lead to a re-test of the previous rally peak of 54 sen. So, check out on that.
Elsewhere, the declines on the daily slow-stochastic momentum index appeared to have paused despite keeping the sell signal, triggered at the 72% level in mid-week.
In stark contrast, the 14-day relative strength index fell to a low of 43 in mid-week before curving up to settle at the 60-point level yesterday.
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Also, the daily moving average convergence/divergence histogram sustained the upward thrust towards the zero threshold, in tandem with the daily signal line. It had issued a buy on Nov 19.
Technically, indicators are clearly on the mend, albeit on a gradual basis, suggesting Denko shares are poised to improve in the near term and if buying momentum is strong enough, we may see this stock making a positive breakout.
Trailing exit is set at the 23-sen level.
The comments above do not represent a recommendation to buy or sell.
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