THERE could be more upside in store for N2N CONNECT BHD (code: 0108) if it overcomes the immediate resistance line to indicate an end to the ongoing consolidation phase.
The 85-sen mark serves as a significant hurdle to the share price as it represents the high point of its performance prior to the Covid-19-induced slump.
During its recovery phase in the latter half of March through to early June, the stock managed to surpass the obstacle to hit a more recent high of 90.5 sen. Since then, the stock has come off the recent highs and meandered in range-bound trading.
In Thursday trading, the counter saw a resurgence of trading activity, with volumes reaching its highest in recent memory. There was a jump in share price although the stock failed to convincingly breach the stiff resistance of 85 sen. Yesterday, the stock continued to hover just below the obstacle.
Going by the technical indicators, there is some growing momentum that could help the stock overcome this temporary pause. The slow-stochastic momentum index has reached higher and given a “buy” signal while the 14-day relative strength index has also advanced nearer to the overbought line at 67 points.
There is still room for growth though, and given that the indicators fall short of offering an overbought signal, there is yet opportunity for the share price to rise above the immediate challenge.
In so doing, the stock is expected to re-test the recent high of 90.5 sen, with a bullish crossing taking the stock yet higher to 93 sen.
The 50-day simple moving average soared past the 100- and 200-day SMA lines in mid-June, and continues to rise, affirming the bullish momentum that has come into play.
Support for the counter can be found at 77.5 sen and 75 sen.
The comments above do not represent a recommendation to buy or sell.
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