KUALA LUMPUR: A futile attempt to recover in
August last year triggered a fresh bout of selling, which witnessed
Emico Holdings Bhd shares falling to a three-year low of 17 sen in a
four-month correction process amid extended profit-taking activity.
Thereafter, in the wake of light bargain hunting interest, prices
drifted marginally higher but in volatile session on consolidation.
Riding on the strength of the main market, this stock bounced to a
high of 24.5 sen in the morning session, the best level since November
10, last year before paring gains slightly to close midday at 22.5 sen,
up two sen.
Based on the daily chart, Emico appears to be making another effort
to mend after a long bearish phase apparently, but further observation
still is needed.
Prices are expected to face significant resistance at the 28.5 sen barrier.
A breach of this barrier would pave the way for them to challenge
the upper heavy resistance of 40 sen mark, of which a decisive breakout
would see the fate of this counter turning brighter. So check out on
that.
Elsewhere, the oscillator per cent K and the oscillator per cent D
of the daily slow-stochastic momentum index were rising. It had issued a
short-term buy at the very oversold area late last week.
Similarly, the 14-day relative strength index firmed to a high of 83 in early trading, up from a reading of 43 points yesterday.
In addition, the daily moving average convergence/divergence histogram climbed over the daily signal line to trigger a buy.
Technically, indicators are improving, implying Emico shares are
likely to strengthen in the short-term, with a potential of turning
around.
The recent lows of 17 sen will now act as a tentative floor for recovery, also the trailing exit level.
