AFTER several days of gains, Teo Seng Capital Bhd
's rebound is fast-approaching a resistance level that may see the stock entering a consolidation phase.
On Wednesday, the counter advanced to an intra-day high of RM1.15, ending under the 21-day simple moving average (SMA) and also short of crossing the convergence of 50- and 100-day SMA lines at RM1.17.
This suggests a stiff challenge overhead, which could put a pause to the short-term ascending trend as investors take stock of recent gains.
A positive crossing of this hurdle however would be a technical breakthrough for the counter, opening the gates for an advance towards RM1.27.
The outlook on the daily price chart remains bearish given the sharp decline experienced from May 17 to 22.
While the short-term SMAs continue to fall, the 50-day SMA looks en route to crossing below the 100-day SMA, putting more negative pressure on the share price.
Despite these technical headwinds, there is evidence from the rising momentum that the short-term uptrend remains intact for the time being.
Looking at the technical indicators, a more positive picture is developing. The slow-stochastic momentum index has risen closer to overbought levels at 74 points.
The 14-day relative strength index has risen to 53 points, showing healthy progression.
The daily moving average convergence/divergence line has crossed the signal line to indicate a "buy" signal.
The 21-day SMA line pegged to RM1.08 serves as a support for the share price in the event of a rereat. Lower still, further support rests at RM1.02, near where the 200-day SMA is fast rising.
The comments above do not represent a recommendation to buy or sell.
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