Digistar likely to continue shining

AFTER a three-day break for the Hari Raya Aidilfitri and Merdeka Day holidays, share prices on Bursa Malaysia played catch-up with a technical rebound on Friday. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) staged a late rebound, moving in counter-trend to the consolidations on the New York and Asian stock markets last week.

The FBM KLCI continued to stay above its key support level of 1,450 points when it closed at 1,474.09 on Friday. The benchmark index rebounded from a low of 1,446.12 last Monday to a high of 1,483.79 last Friday, giving a trading range of 37.67 points for the week.

The FBM KLCI posted a gain of 29.28 points, or 2.03 per cent, for the week.

Among other indices, the FTSE Bursa Malaysia Small Cap Index advanced 166.93 points, or 1.48 per cent, to 11,410.50 while the FTSE Bursa Malaysia ACE Market Index gained 97.58 points, or 2.63 per cent, to 3,803.01.

On the foreign front, the New York Stock Exchange consolidated last week. The Dow Jones Industrial Average lost 0.4 per cent for the week, thanks to a 2.2 per cent plunge on Friday; it ended at 11,240.26.

The broad-based S&P 500 had a 0.2 per cent drop for the week, on the back of a 2.5 per cent loss on Friday, to 1,173.97.

The tech-heavy Nasdaq Composite just barely kept its head above water, managing a 0.02 per cent gain, despite falling 2.6 per cent on the last day. It ended at 2,480.33.

The Hong Kong stock market, however, staged a technical rebound last week. The Hang Seng Index closed at 20,212.91 on Friday for a week-on-week gain of 630.03 points, or 3.22 per cent.

In Tokyo, the stock market's main barometer continued to stay below its critical support of 10,000 points. The Nikkei 225 Index rose 152.96 points or 1.74 per cent, to 8,950.74.

On Bursa Malaysia, Digistar Corporation Bhd staged a mild rebound. Its share price closed at 42 sen on Friday, giving a week-on-week increase of 0.5 sen, or 1.20 per cent.

The following are the readings of some of its technical indicators:

Moving Averages: Digistar's daily price trend stayed above its 200-day moving averages. It continued to trend marginally below its 10-, 20-, 30- and 50-day moving averages.

Momentum Index: Its short-term momentum index had since stayed above the support of its neutral reference line last week.

On Balance Volume (OBV): Its short-term OBV stayed below the support of its 10-day moving averages.

Relative Strength Index (RSI): Its 14-day RSI had since stayed above the 50 level. Its technical reading stood at the 46.18 per cent level at the market close on Friday.

Outlook

While key heavyweight index-linked counters played a pivotal role in the FBM KLCI's rebound last week, selected ACE Market counters emerged with signs of accumulation by investors. Digistar was one of these counters.

Digistar focuses mainly on broadcasting infrastructure. It has an eye on the nationwide project to convert analogue broadcasting systems into digital mode, at the latest by 2015. This broadcasting system migration is likened to that of Y2K at the turn of the century.

For Malaysian broadcasters, it will translate into roughly RM2.5 billion worth of business opportunities between now and 2005.

Digistar has the technical know-how to take advantage of this migration programme as the company is currently handling the digital conversion for a private broadcasting station.

Chartwise, Digistar's monthly price trend broke above its multi-year overhead resistance last week. This augurs well for its intermediate- to long-term perspectives.

Its weekly price trend continued to trend above the support of its intermediate-term uptrend (see Digistar's weekly price chart B1:B2) last week.

Digistar's daily price trend continued to trend above its intermediate-term support (See Digistar's daily price trend C1:C2) on Friday.

Its daily and monthly fast MACDs (Moving Average Convergence Divergence indicators) continued to stay above their respective slow MACDs at the market close on Friday.

Its 14-day Relative Strength Index (RSI) stood at the 46.18 per cent level. Its 14-week and 14-month RSI were at the 55.50 and 74.54 per cent levels respectively.

Digistar's daily and weekly price trends stay above their respective intermediate-term uptrend will continue to provide the impetus for its daily price trend to move towards its near-term objective at the 55- to 60-sen levels.