Benalec Holdings Bhd (short name: Benalec, Code: 5190) suffered a prolonged downtrend as a futile attempt to recover on several occasions sparked more liquidation pressure, dragging the shares to an all-time low of 46.5 sen on June 14.
Thereafter, prices turned range-bound briefly amid bargain hunting interest offsetting selling on consolidation before bouncing off in the wake of renewed buying momentum.
This stock recovered to a high of 52 sen during intra-day session but finished a tick lower at 49.5 sen yesterday.
Based on the daily chart, the prevailing trend of this counter is still bearish, but it looks like it has finally found the bottom following a spike in the share price in the past couple of days.
The expansion in trading volumes added to our optimism and the trend going forward would be a healing process.
Perhaps, traders can consider taking up a position at current levels, if one has faith in the trend ahead.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index had indicated a tentative topping out pictogram near the overbought area, but retained retained the buy signal.
In stark contrast, the 14-day relative strength index settle at the 73 points level, up from a reading of 23 points the previous week.
The daily moving average convergence/divergence histogram continued to rise steadily, in tandem with the daily signal line towards the neutral line. It had issued a buy signal on Thursday.
Technically, most of the short-term indicators are painting a fairly promising landscape, suggesting Benalec shares are likely to advance in the immediate term, with a potential of coming out of the rut.
Initial strong resistance is pegged at the 200-day simple moving average of 54 sen. A breach of the next upper hurdle of 62 sen would further confirm that Benalec is indeed on the mending course, enroute to the 68 sen level, or the greater resistance of 73.5 sen-75 sen band. The historical ebb of 46.5 sen will now act as an important floor, also a tentative base for recovery. – By K.M. Lee
The comments above do not represent a recommendation to buy or sell.