Supercomnet Technologies Bhd (code: 0001) came close to challenging the immediate resistance on Friday as it extended its advance in intra-day trading.
Over the recent term, the stock could be seen along in a sideways pattern before making a decisive thrust higher on Thursday.
That surge in momentum helped to free the stock from a consolidation phase, and given Friday’s intra-day advance, there is an improved chance of a breakout despite the the stock closing slightly lower.
Trading volume over the these last two sessions of trading was also elevated, meeting levels last seen on Sept 11.
At present, the stock is trading above its key simple moving averages (SMA). It is also capitalising on an ascending trend line that can be drawn from Aug 6 this year, suggesting that this most recent rally is a continuation of a positive trend.
The 50-day SMA can also be seen making its way higher, and is on the verge of crossing above the 100-day SMA, which would represent a positive crossing and a more bullish outlook for the counter.
The resistance is pegged to 92 sen, a whisker away from the intra-session high seen on Friday.
Should this hurdle be breached, the next resistance can be seen pegged to 99 sen, which represents the stock’s historical high set in June this year.
The technical indicators show the stock being overbought. The 14-day relative strength index is retreating in overbought conditions to 71 points, which puts it on the verge of neutralising.
However, the slow-stochastic momentum index remains at 61 points, which offers room to grow before it crosses into overbought conditions. The daily moving average convergence/divergence line has moved ahead of the signal line, which is a “buy” sign and signals bullish momentum.
Based on these indications, the stock is on a growth trend. Support for the share price can be found near the convergence of 14- and 21- day SMAs at 83.5 sen. Next support is pegged to the recent low of 78 sen.
The comments above do not represent a recommendation to buy or sell.
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