Tomypak Holdings

  • Support Line Premium
  • Wednesday, 04 Dec 2019

TOMYPAK HOLDINGS BHD advanced on Tuesday in a sign of returning momentum after the end of a correction phase.

On Tuesday, the share price soared above the key simple moving averages (SMA) to signal returning bullish sentiment to the counter.

Tuesday's advance came within striking distance of a recent high of 55.5 sen, marking the 38.2% Fibonacci retracement level of the correction seen between Jan 14 and Aug 27, making it a significant hurdle to a positive outlook.

Trading volume during the session also rose to a seven-month high, indicating the return of investor interest to the stock.

In the event of a positive crossing of the 55.5 sen mark, the stock could see further resistance at 62.5 sen, which offer a Fibonacci retracement level of 61.8%.

There is a convergence of the SMA lines at the 50-51 sen level, reflecting the sideways trading channel. This trading level offers immediate support to the share price in the event of a retreat.

However, a breach of the support could see the stock retreat to its recent low of 47.5 sen, and signal a continuation of the recent correction phase.

The technical indicators are currently favouring the bulls. The slow-stochastic momentum index has triggered a "buy" signal as the percent K oscillator meets the percent D oscillator.

The daily moving average convergence/divergence line similarly is sitting atop the signal line. A further advance on buying would complete the crossing and offer a "buy" signal.

The 14-day relative strength index has passed the centre line at 56 points, also suggesting a rising momentum.

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

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