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KAREX Bhd saw a surge in share price and trading volume on Wednesday, suggesting that a strong buying catalyst had come into play.

The counter had hit an all-time low of 37.5 sen in Feb 4 this year, following which it seemed to recover some postive momentum.

However, the notable increased in buying momentum on Wednesday suggests there is a possibility that the stock is due for a stronger retracement.

http://www.thestar.com.my/business/business-news/2019/04/11/karex/
  
However, the notable increased in buying momentum on Wednesday suggests there is a possibility that the stock is due for a stronger retracement.

At Wednesday's intra-day high of 53.5 sen, the share price had crossed above the 100-day simple moving average (SMA), which had remained intact since October 2018.

Trading volume in the counter soared to about 64 million shares, its highest since the company was listed in November 2013.

Going by the share price's current trajectory, there seems to be clear path towards the 200-day SMA at 61 sen, an attractive target that would return the stock to a longer-term bullish outlook if challenged.

The 200-day SMA line has stayed intact since February 2017, when Karex's share price began on long-term dowtrend.

The momentum indicators have turned decidedly positive, suggesting that a sustained rally may be in store.

The 14-day slow-stochastic momentum index surged to 73 points, indicating strong momentum while the 14-day relative strength index spiked into overbought territory at 90 points.

The daily moving average convergence/divergence line has risen off the signal line, reflecting growing strength in the uptrend.

In the event of profit-taking, the 100-day SMA is a resistance-turned-support at 47.5 sen. The convergence of the short-term 14- and 21-day SMA lines at 45 sen also suggests that future consolidation would see the share price hovering near this level.

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