Econpile Holdings Bhd
has made big strides this year, rising from the RM1.85 level in early January to an all-time-high of RM3.21 on Sept 7.
After hitting that peak, however, the stock took pause from its ascent and began trading sideways, undergoing a healthy consolidation.
Based on the daily chart, there was a second attempt to reach the peak on Nov 1, but in failing to do so, the counter went into correction mode, culminating in a sharp 17 sen drop on Monday that saw it slip below the 100-day simple moving average line (SMA) at RM2.88 during intra-day trade.
The 100-day SMA was a crucial support level, and despite the violation, the stock staged a rebound, which took it to where it stood on Thursday: trending higher to a market close of RM3.10.
The 16 sen jump pushed the counter past the resistance posed by the 14-, 21- and 50-day SMAs in the RM3.04 to RM3.08 range.
Trading volume for the counter has been strong over recent days, and there is certainly enough buying momentum to suggest it could mount a challenge of the recent peak.
The slow-stochastic momentum index has triggered a short-term “buy” signal in the lower end of the neutral area.
Meanwhile the daily moving average convergence/divergence histogram has levelled out in the negative territory and looks ready to move back up across the signal line.
Also, the 14-day relative strength index is in an upward-facing posture, which indicates growing strength for the current wave.
The 100-day SMA, which has remained intact since the first quarter of 2016, save for the sudden violation on Monday, continues to offer support at the RM2.90 level, while the next lower floor is pegged at the RM2.70 mark.
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