EA Technique (M) Bhd, which staged a crossing of the short-term descending trend line on Jan 5, has halted in its tracks and traded in range-bound motion over the past week.
At present, it appears the burgeoning uptrend may be at risk of stalling due to an impending correction. Nevertheless, a temporary pullback may just pave the way for the counter to muster some energy before it mounts a further approach to the resistance.
A drop in positive momentum is reflected in the falling slow-stochastic momentum index, which didn’t go too far into overbought territory before it turned nose-down towards neutral ground.
However, the daily moving average convergence/divergence histogram suggests the uptrend remains intact, as it pushes further afield in positive territory.
The 14-day relative strength index also has briefly returned to a positive trajectory.
EA Technique faced negative pressure towards the end of the third quarter last year, falling from a recent peak of 56 sen on Sept 25.
The downtrend took the counter to a bottom of 36.5 sen on Dec 22 before the resurgence of some buying interest.
While the counter may be not breaking out of its overwhelming bearish medium and long-term formation soon, it may reverse the short term via a futher push towards the 56-sen mark.
In between, the stock will face resistance from the uppermost 200-day simple moving average at the 48-sen point and another obstacle at the 52-sen mark higher on the chart.
A break out of the 56-sen resistance will suggest a significant change of fortunes for the counter, as it will then be unshackled to roam higher to an earlier peak of 73.5 sen set on Jan 14, 2017.
As can be expected, some strong positive catalysts will be needed to give the counter the requisite buying interest and momentum.
Should this current attempt fizzle, the counter will descend to the 36.5-sen support level, and below that, a recent low of 35 sen.
The comments above do not represent a recommendation to buy or sell.
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