Eye On Stock - Genting Malaysia

GENTING Malaysia Bhd (code: 4715) appeared to be initiating a rebound in Friday trading as it turned higher to cross the 100-day simple moving average (SMA) on bullish momentum.

Breaking free of the moving average at RM3.15 in intra-day trade, the counter appears to be regaining some strength after retreating from the RM3.47 resistance on March 18. Based on the daily price chart, the share price is moving below the key SMA lines, which suggests a bearish outlook.

The 14- and 21-day SMAs remain at descending angles, which signals the immediate downtrend remains intact. However, another session of buying would likely turn the short-term moving averages towards a bullish posture. Should the rebound take root, the stock could be aiming higher for a positive crossing with the 50-day SMA at RM3.28, which would indicate a return to positive sentiment. There is optimism that the share price is angling for yet another challenge to the RM3.47 mark, having been turned back twice in recent months.

A breach of the resistance would see the share price return to November 2018 levels, prior to a heavy sell-off on news that Twentieth Century Fox was pulling out of the Genting theme park agreement. The RM3.47 mark represents the upper limit of the trading gap left behind during the sell-off.

The momentum indicators show a strong return from oversold levels following Friday’s share price advance.

The slow-stochastic momentum index reached 50 points touching the mid-line, which indicates growing momentum. The 14-day relative strength index also rose out of oversold conditions and stopped at 64 points, in a strong push towards the higher end of the neutral zone.

Meanwhile, the daily moving average convergence/divergence (MACD) line stopped right on the signal line, falling short of a positive crossing and giving a “buy” signal. A further session of gains will confirm the crossing, signaling a growing uptrend as the MACD line rises towards the zero line.

The share price continues to see support at the RM3.05 mark. A crossing below that mark would see it descend towards December 2018 levels at RM2.86 or lower at RM2.70.

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