SMTRACK Bhd (Code: 0169) is on a short-term uptrend in the wake of renewed bargain hunting buying, and is making its latest effort in trying to break out of a medium-term downtrend pattern that goes back to May 2015.
Based on the daily chart, the new leg of upward thrust started on Oct 7 when the stock bottomed out at the 12-sen level before rebounding over the course of the month to break free of the downward pressure applied by the simple moving average (SMA) lines.
As at Thursday, the prices had penetrated the resistance posed by the uppermost 200-day SMA and risen to an intra-day high of 21 sen. It repeated the performance yesterday, once again challenging the 21-sen barrier during intra-day trade, but couldn’t go further on lack of follow-through interest.
There needs to be more conviction in the crossing if SMTrack is to break out of its bearish medium-term pattern.
The descending trendline resistance is set at 26.5 sen although there are minor hurdles along the way that could stop the counter’s rise in its tracks once it loses momentum.
But, if SMTrack manages to revisit and eventually breach the 26.5 sen stiff barrier, the next obstacle lies at the 34-sen mark, which would see it touching a six-month high.
Meanwhile, trading volume seems to be piliing up steadily since mid-October.
In terms of the technical indicators, they are looking pretty encouraging despite showing a slightly overbought situation.
The daily moving average convergence/divergence histogram has returned to positive territory in a gentle ascending pattern since last month.
Also, the 14-day relative strength index has tracked to its highest level this year, and continues to move deeper into the bullish area.
In stark contrast, the slow stochastic momentum index is backtracking after peaking out at the top on Thursday, suggesting that it is looking to neutralise.
The immediate support is pegged at the 17-sen level. — By Fong Min Yuan
The comments above do not represent a recommendation to buy or sell.