Scicom (MSC) Bhd (code: 0099) made a convincing breach of the uppermost 100-day simple moving average (SMA) yesterday, indicating that it has entered a new, higher leg of trading.
The share price growth over the last two trading sessions have retraced all the losses made during a recent decline and put the stock in position to resume its rally.
The short-term 14- and 21-day SMAs are now turning higher, offering some lift to the share price. Some further share price gains could turn the 50-day SMA higher towards the 200-day SMA, a crossing of which would strengthen the price chart outlook.
Investor interest in the counter, meanwhile, has grown to a three-month high as a positive lead triggers buying in the stock.
At this budding stage of the stock’s recovery trend, there leaves room yet for the bulls to roam.
Overhead, the resistance is pegged to RM1, which represents the 50% Fibonacci retracement level. Some profit-taking at this stage could stagger the stock’s advance, but a subsequent breach would be a bullish signal for the share price hit a target of RM1.06.
The technical indicators remain positive, suggesting continued bullishness, although the 14-day relative strength index is just peeking into overbought territory.
The slow-stochastic is showing promise as it crosses into a “buy” signal at the 50-point line. The crossing remains tentative, but can be confirmed following another bullish turn in the coming session’s price performance.
Meanwhile, the daily moving average convergence/divergence line has entered positive territory to confirm the start of a positive trend.
Support for the stock can be found at the recent low of 88.5 sen and 84 sen.
The comments above do not represent a recommendation to buy or sell.