GENTING Malaysia Bhd (code: 4715) is moving in consolidation mode after a sharp correction from Oct 10 to 15 that saw its share price lose 13% of its value.
The stock had touched bottom at RM4.29 before it pushed back from oversold conditions to retrace some of the losses.
However, the rebound only took the counter about halfway back before it hit a resistance of RM4.59. Failing to move past this hurdle, there is growing negative pressure on the share price as the key simple moving averages (SMA) continue to fall.
The daily price chart shows that Genting Malaysia remains in a bearish formation, trading well below the key SMAs.
Based on yesterday’s negative closing, investors remain uncertain over the stock despite its low valuations, currently at its year’s low. Some bullish price action in the early session reflected a pick up in buying interest before the counter succumbed to further selling. Nevertheless, the technical indicators showed improving momentum although trading volume remained unexceptional suggesting a significant interest in the share had not yet built up.
The slow-stochastic momentum index is resting at 21 points with the percent K oscillator approaching the percent D oscillator to indicate a return to bullishness. The daily moving average convergence/divergence line has also arched up towards the signal line, indicating the possible return to an uptrend.
The 14-day relative strength index is hovering at 35 points but has slipped to a negative trajectory. Should the stock swing once more to the upside, the share price can be expected to reach towards the immediate obstacle of RM4.59. Nevertheless, the indicators only suggest budding strength, with little evidence that momentum will follow-through to a positive breach of the resistance.
It would take some positive catalyst to bolster the buying interest before a crossing can be confirmed. Looking overhead, the next target would rest at RM4.66, the upper limit of the downside gap left behind on Oct 10.
In the event of negative news or profit-taking, the stock could slip into the next lower trading range between RM4.29 and the current immediate support of RM4.38.
The comments above do not represent a recommendation to buy or sell.