Eye on Stock - MULPHA

MULPHA International Bhd has been in correction mode since peaking out at a 27-month high of 68 sen on Jan 17.

Based on the daily bar chart, an attempt to recover in mid-March was interrupted on lack of follow-through interest and thereafter, a bout of selling pressure re-emerged, dragging prices back into consolidation.

The shares touched a low of 47.5 sen on Tuesday. Fortunately, just when they looked defenceless and appeared in danger of violating the 46.5 sen crucial floor, fresh bargain hunting become apparent, thus helping this stock to rebound to a high of 50.5 sen during intra-day session yesterday.

Elsewhere, the daily slow-stochastic momentum was on the mend. After triggering a short-term buy at the grossly oversold area, the oscillator per cent K and the oscillator per cent D sustained the climbing to settle approximately at 53% and 36% respectively yesterday.

Mirroring the trend, the 14-day relative strength index improved sharply from a reading of 27 on Monday to end at the 65 points level yesterday.

Meanwhile, the daily moving average convergence/divergence histogram staged a positive crossing against the daily signal line to issue to buy call yesterday. Analysis on the price action, combined with the encouraging technical development, suggest Mulpha International may be making preparation to recover.

Initial resistance is pegged at the 200-day simple moving average of 52 sen. The next upper hurdle is seen at the 59 sen-60 sen band, of which a successful penetration may lead to a re-test of the previous rally peak of 68 sen in the near term.