Leader Steel Holdings Bhd (Lsteel; Code: 9881) shares slipped into correction mode owing to an apparent profit-taking activity after peaking out temporarily at a near nine-year high of 66.5 sen on June 9 following a massive rally.
However, the pullback was somewhat shallow, which witnessed prices finding a shelter at the 21-day simple moving average of 56.5 sen on Tuesday. Thereafter, Lsteel made an effort to resume the rally but it was not successful because the bulls simply could not attract strong follow-through interest, as many investors were starting to go away for the long festive break over the weekend.
For that simple reason, this stock traded within a range but with a mild upward bias, undergoing consolidation.
Based on the daily chart, it looks like the bulls have not completed the upward course just yet, as there was no evidence of unusual liquidation pressure during the recent pullback, but thin trading volumes suggesting those who bought earlier are still optimistic and holding on to the shares. Perhaps, investors can consider accumulating more on dips.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the rise after triggering a short-term buy near the oversold area in mid-week.
Though the daily moving average convergence/divergence histogram retained the posture below the daily signal line to keep the “sell” call, issued on Tuesday, the downward momentum had decelerated significantly.
Elsewhere, the 14-day relative strength index rose from a reading of 43 on Wednesday to a high of 61 the next day before ticking down slightly to settle at the 58-point level yesterday.
Technically, indicators are tricky, suggesting Lsteel shares are likely to drift sideways on extended consolidation mode.
A successful penetration of the recent highs of 66.5-sen barrier will signal an uptrend continuation, en route to the 85-sen level. The next upper resistance is expected at the 99 sen-RM1 area. As for the downside, important support is pegged at the 53-sen line, followed closely by the 50-sen mark. — By K.M. Lee
The comments above do not represent a recommendation to buy or sell.
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