Eye on stock; Axiata Group


AXIATA Group Bhd (code: 6888) established a new all-time high of RM7.40 on May 6, 2013 following a massive rally.

Thereafter, this stock was generally in range-bound consolidation mode, lasting nearly two years.

During the process, the bulls made three notable attempts to move into unknown territory, once in November 2014 and twice in February 2015, but without success.

Axiata then slipped into correction mode and has stayed that way amid persistent profit-taking activity, which saw prices skidding to as low as RM4.11 in late November last year, the worst level in six years.

Soon, renewed bargain hunting interest emerged, helping to lift Axiata shares off the ebb. This counter finished flat at RM5.09 yesterday.

Based on the daily chart, Axiata has recovered back to the three-year-old descending trendline and the trend ahead is pretty straightforward.

A breach of the immediate resistance of RM5.20 accompanied by bigger trading volumes will signal the end of the correction phase. Another positive breakout of the next upper hurdle of RM5.40 will further raise investors’ optimism that Axiata is indeed on a new leg of uptrend.

Otherwise, this stock may drift sideways at best, if not retreating on another round of correction. Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were on the slide. It had triggered a short-term sell near the overbought area on Sept 13.

Also on the decline, the 14-day relative strength deteriorated from a reading of 78 on Sept 12 to end at the 61 points level yesterday.

Meanwhile, the daily moving average convergence/divergence histogram was still above the daily signal line to keep the buy call, but is weakening.

Technically, indicators suggest a bullish breakout remains elusive, but we are not discounting that, if the underlying tone of the principal market turns better, as Axiata has been generating some interest lately.

To the downside, initial support is pegged at the RM5 mark, followed-closely by the RM4.90 line. A crack of the lower floor of RM4.78 may drag prices down to the RM4.54-RM4.55 band. 

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