MALAYSIA Airport Holdings Bhd may rally from an oversold position as it bounces off the lower end of a trading channel.
On Tuesday, the counter made a slight advance in consolidation mode, which was a continuation of its recent sideways trading movement.
However, some technical indicators are growing more positive, which could be signaling a potential rally over the near term.
A bullish development is taking place in the slow-stochastic momentum index as the percent K oscillator curved upwards from an oversold position to rise above the percent D oscillator.
While issuing a "buy" signal, the index is coming close to crossing the oversold line at 17 points, suggesting a return to bullishness.
The 14-day relative strength index is similarly growing in momentum, and is moving higher at 44 points.
However, the daily moving average convergence/divergence line remains a bearish indicator, as it continues to fall below the signal line, suggesting that the downtrend remains intact.
Should the share price sustain its advance it would head towards the immediate resistance at RM8.88, which represents the top end of the current trading channel.
A breach of this upper limit would mark the end of the consolidation and a return to a positive trend.
The short-term simple moving averages (SMA) remain uncommitted given the recent sideways share price movement but the 50-day SMA lends a more bullish outlook, having crossed above the 200-day SMA in a “golden crossing”.
Support for the share price is at the lower end of the consolidation range at RM8.50. The next support can be found at RM8.04, coindentally where the 50-day SMA is now resting.
The comments above do not represent a recommendation to buy or sell.
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