Kobay Technology Bhd (code: 6971) could be seeing the end of its correction phase as it made a rebound near the support yesterday.
The stock had twice hit a historical high of RM5.50 this year, before the resistance turned back the advance both times.
Now that the share price is headed higher once again, there could a third attempt at the hurdle.
Regardless, there are some decent upsides between the current share price of RM4.80 and RM5.50, as the stock makes its recovery.
Based on the daily price chart, the dominant trend remains positive. The mid and long-term simple moving averages are headed higher on a bulish trajectory.
Over the coming sessions, the short-term 14 and 21-day SMAs overhead are expected to turn higher, confirming the resumption of a recovery trend.
Looking at the technical indicators, the slow-stochastic is on the verge of rising out of oversold territory, signalling the end of the correction phase.
The 14-day relative strength index is growing stronger, approaching the neutral zone at 46 points.
As for the daily moving average convergence/divergence line, it remains downfacing but could turn its head with further sessions of recovery.
What remains lacking, however, is strong trading interest in the stock, which remains tepid as at yesterday. The surge to RM5.50 back in January and early February was achieved on the back of elevated levels of trading volume.
A return of these trading levels, coupled with growing momentum on the technical charts, would send a strong buying signal in the coming days.
On the lower end of the price chart, support for the share price is found at RM4.50, which has so far served as a reliable platform for a rebound.
A breach below this level would be a strong bearish signal, with the next support resting at RM3.88.
The comments above do not represent a recommendation to buy or sell.