Eye on stock: Kossan Rubber Inds

by **Cals** Sat 15 Aug 2015, 16:40

Eye on stock: Kossan Rubber Inds

Saturday, 15 August 2015

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KOSSAN Rubber Industries Bhd retraced from an all-time peak of RM7.50 on Aug 8 to a two-month low of RM6.44 in mid-week owing to an apparent profit-taking activity, triggered by the rout on the principal market front.
Thereafter, prices stage a nice rebound the following day, hitting a high of RM6.90 during intra-day session in the wake of renewed bargain hunting interest before turning range-bound on consolidation.
This stock fluctuated between an intra-day high and low of RM6.90 and RM6.70 respectively before ending yesterday’s session at RM6.87, up 7 sen. Based on the daily daily chart, the massive rally in Kossan shares that started in April 2013, remained intact despite the recent beatings.
Initial support is pegged at the 100-day simple moving average (SMA) of RM6.38, of which a crack may drag the shares down to the lower 200-day SMA of RM5.66.
An additional floor is resting at the RM5.60 mark, also an important support and should this line is violated, it will alter the outlook of this counter from bullish to bearish.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were ticking up gradually from the bottom after triggering a short-term buy deep in the oversold area on Thursday.
A slight improvement was also seen on the Money Flow Index indicator.
In stark contrast, the daily moving average convergence/divergence histogram retained the posture sharply below the daily signal line to retain the bearish note. It had issued a sell a week ago.
The past week witnessed the 14-day relative strength index hitting a high of 41 on Thursday before curving down slightly to close at the 37-point level yesterday.
Technically, indicators are mixed, suggesting Kossan shares may trade range-bound, probably until a clearer picture emerges.
To the upside, this counter will now face significant resistance at the RM7.10 barrier, followed by the historical apex of RM7.50. — By K.M. Lee
The comments above do not represent a recommendation to buy or sell.