Carimin Petroleum

Carimin Petroleum Bhd saw a rebound on Tuesday as its share price reversed gears to head above the 200-day simple moving average (SMA).

The stock has come under selling pressure of late, descending at a steep angle since Jan 6 to trade below all the key SMA lines.

However, Monday's bounce off an intra-day low of 93 sen suggested that the stock had hit its bottom and was now entering recovery mode.

Looking at the technical indicators, there is an ongoing recovery from oversold levels, suggesting that the rebound is taking root.

The slow-stochastic momentum index has crossed above the oversold line to 28 points to suggest more bullish momentum. The percent K oscillator's move above the percent D oscillator triggered a “buy” signal, which is reflective of the improving sentiment.

Affirming this view, the 14-day relative strength index has similarly risen from oversold conditions to 43 points to reflect recovery.

The daily moving average convergence/divergence (MACD) line remains in negative territory but has plateaued. Should the buying be sustained over future trading sessions, the MACD will approach the signal line to suggest the return of positive momentum.

Following Tuesday's advance, the stock is now looking towards a resistance of RM1.10.

However, there are tough obstacles lying ahead as it faces downward pressure from the falling SMA lines, reflecting the bearish trend that has taken root.

The outlook on the daily price chart remains bearish, but should turn positive if the share price should cross the 50-day SMA.

On the lower end of the chart, the share price sees immediate support at 99.5 sen while the recent low of 93 sen serves as further support.

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

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