GLOBETRONICS tumbled to a low of RM3.12 in early session, the worst level since March 2014 before reversing to finish sharply higher. While the oversold condition on the stochastic momentum index and the 14-day relative strength index offers a reason for technical rebound in the short-term, the upside is likely to be limited as the moving average convergence/divergence histogram is still bearish. A crack of the RM3 psychological floor may pull prices down to RM2.17, which is the 76.4% Fibonacci retracement of the previous rally from 73.5 sen on Dec 8, 2011 to an all-time high of RM6.82 on Jan 6. Resistance is expected at the RM3.78-RM3.80 band.
MYCRON Steel rose to a high of 46 sen during intra-day trading, the best since September 2014, but finished a shade lower owing to apparent profit-taking activity. Technically, all the short-term indicators are painting a pretty encouraging pictogram, implying prices are likely to firm in the near term. A major breakout of the descending line of 55 sen would signal a bullish turnaround, clearing the way for the shares to challenge the relatively upper heavy resistance of 90 sen in the medium term. Initial support is lying at the 40-41 sen range. An additional floor is pegged at the 35-sen level.
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