LOTTE Chemical Titan Holding Bhd (code:5284), which made its debut this year to much fanfare as Malaysia’s biggest initial public offering since 2012, is still wallowing in the doldrums.
The integrated petrochemical producer started at the lower end of its indicative price range at RM6.50 in July.
But the company soon ran into trouble and nose-dived over July 31 and Aug 1 to what is to date its historical intra-day low of RM4.14.
A subsequent rebound saw the counter headed for a September peak of RM5.94 before it resumed a downtrend.
The short-term descending trend line remained intact over the next 3½ months, although there is now some upward movements that may see Lotte breaking out of the negative pattern.
The recent bottom tested by the counter was at RM4.57 on Dec 12. However, the rebound lacked any sustained push to mount a serious challenge to the downtrend.
On Friday, the counter rose to an intra-day high of RM4.94, which was within striking distance of the descending trendline at RM5, although it ended the day with a loss over the previous session.
The trend line is a crucial immediate hurdle for the stock to rise to an initial level of RM5.44 before attempting to scale the September peak of RM5.94.
The technical indicators are mixed but suggest that there may be a chance to reverse the descending pattern.
The slow-stochastic momentum index remains in a bullish posture while the 14-day relative strength index has turned back to a negative trajectory.
The daily moving average convergence/divergence histogram is also growing stronger and has issued a “buy” call although it is yet to rise above the neutral line.
On the bottom end of the chart, the counter is supported by its recent low of RM4.57, although a drop below this mark is a sign of a possible return to an all-time-low level at RM4.14.
The comments above do not represent a recommendation to buy or sell.