Eye on stock: Astro Malaysia Holdings

 

Astro Malaysia Holdings Bhd has come down a long way since its peak of RM2.94 on Oct 26, 2017.

Looking at the daily price chart over the last nine-month period, the stock has been in a decidedly bearish trajectory, resulting in “death crossings” in the key simple moving averages (SMA), suggesting a protracted negative outlook.

The downtrend took the counter to a low of RM1.31 on May 31 this year before making a rebound and retracing to RM1.85.

However, at this point, the stock could go no further as it pulled back and became trapped in consolidation mode.

The sideways channel had a bearish bias, trapped under the 50-day SMA.

Nevertheless, price action over this past Thursday and Friday seemed to spark off what may be a break out of the current consolidation.

Beginning with a surge in trading interest on Thursday, the stock saw a pick up in positive momentum and a rise to the upper end of the channel.

At Friday’s session high of RM1.69, the stock had breached the 50-day SMA and was en route to the immediate resistance at RM1.85.

The question now remains if Astro can maintain this newfound momentum and continue its ascent. While the longer trend remains overwhelmingly negative, this recent price movement suggests some upsides over the immediate term.

The technicals confirm the buying momentum with a bullish uptick seen in all the key indicators.

The slow-stochastic momentum index saw a sharp rise from under the 30-point mark towards the 50-point mark.

Meanwhile, the daily moving average convergence/divergence line is headed for a positive crossing with the zero line as it outpaces the signal line.

The 14-day relative strength index looks similar to the slow-stochastic, pushing to 59 points. In the event of a profit-taking, the counter could find retreat to the immediate support at RM1.60 although a stronger support lies at the bottom end of the channel at RM1.55.

The comments above do not represent a recommendation to buy or sell.