Eye on stock: Lii Hen Saturday, 29 August 2015

by **Cals** Mon 31 Aug 2015, 21:13

Eye on stock: Lii Hen

Saturday, 29 August 2015

AFTER peaking out temporarily at a high of RM5.92 on July 24, Lii Hen Industries Bhd (Lii Hen) shares pulled back moderately to a one-month low of RM5.03 on Aug 12 on correction owing to an apparent profit-taking activity, exacerbated by the recent market meltdown.
Thereafter, investors emerged from the sidelines to indulge in light bargain hunting interest but buying momentum picked up steam later, as improved global sentiment boosted their optimism.
Based on the daily chart, prices had beaten the stiff barrier of RM5.92 to reach a high of RM6.17 during intra-day session, the best level since October 2004, thus making Lii Hen one of the very few stocks, if not the first counter on Bursa Malaysia, to have fully recovered from the recent market rout.

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Going forward, Lii Hen is likely to firm on persistent buying momentum following the recent positive breakout.
Initial resistance is envisaged at the RM6.33-RM6.35 band, of which a successful penetration may propel prices up to challenge the historical high of RM6.63, set on Oct 27, 2004, or sending the bulls into the uncharted territory.
Elsewhere, the daily slow-stochastic momentum index retained the buy call at the overbought area while the oscillator per cent K and the oscillator per cent D were on the bullish extended-mode.
Meanwhile, the 14-day relative strength index improved significantly from an oversold reading of 18 on Aug 12 to settle at the 80-point level yesterday.
In addition, the daily moving average convergence/divergence histogram continued to expand upward against the daily trigger line to stay bullish. It had issued a buy signal on Tuesday.
Technically, indicators are painting a pretty promosing landscape, implying Lii Hen shares are posied to advance in the short term. As for the downside, the recent breakout point of RM5.92 will now act as the immediate support. The lower floor is pegged at the 14-day simple moving average of RM5.64. — By K.M. Lee
The comments above do not represent a recommendation to buy or sell.