Support Line

SHARES of AirAsia X slipped into correction mode after peaking out temporarily at a 28-month high of 55 sen on May 22. The stochastic and the 14-day relative strength index appear ticking up from the bottom. Combined with the improving signal from the moving average convergence/divergence histogram rising towards the neutral line, prices may trade within a band, but with an upward bias. If there is a significant increase in the trading volumes, the momentum may pick up steam later. Initial resistance is seen at 45 sen and a breach of the next upper strong hurdle will propel this stock up to the 70 sen-73 sen area. A crack of the 35 sen concrete floor will have a negative impact on the outlook.

BREM Holdings was generally undergoing consolidation for more than a month following a solid rally recently. Based on the daily chart, the upward thrust that started in January remains intact and it will stay that way, as long as the firming 50-day simple moving average (SMA) of 97 sen is intact. The trend ahead is pretty simple foing forward. A successful penetration of the RM1.07 barrier will signal the resumption of a rally, probably enroute to challenge the RM1.35 level, last visited in late July, 2014. On the opposite, if the 97 sen floor is taken out, the lowest 200-day SMA line, resting at the 87 sen level, will be in great danger.