Posted on 06 Aug 2014
MALAYSIA Steel Works (KL) Bhd (Masteel) shares touched a nine-month low of 96.5 sen on June 14 during the recent downward adjustment before bouncing off in the wake of fresh bargain-hunting interest.
This stock mended to a high of RM1.07 during intra-day session yesterday.
Based on the daily chart, Masteel remained in a short-term correction phase despite the recent recovery.
A clear penetration of the one-year-old bearish descending line, resting at the RM1.09 level would give investors the confirmation that prices are indeed on the new leg of upward momentum.
In this case, the immediate target would be to challenge the pretty stiff resistance of RM1.19-RM1.20 band, of which a decisive breakthrough will see the bulls becoming more aggressive.
Greater resistance is resting at the RM1.45-RM1.46 range, followed by the all-time peak of RM1.60, set on April 11, 2011.
Elsewhere, the daily slow-stochastic momentum index triggered a short-term buy at the mid-range on Thursday.
The past week witnessed the 14-day relative strength index advancing significantly from the mid-range to settle at 72 points yesterday.
After calling for a buy on July 21, the daily moving average convergence/divergence histogram continued to expand positively in tandem with the daily signal line to keep the bullish note.
Technically, indicators are positive, implying Masteel shares are poised to advance on follow-through interest.
Initial support is pegged at the RM1 mark, which is the 21-day simple moving average line. The recent lows of 96.5 sen will now act as a crucial support floor.
The comments above do not represent a recommendation to buy or sell.
