KUALA LUMPUR: Shares of TIME ENGINEERING BHD [] fell below the crucial 50 sen support level in late morning trade on Tuesday, Nov 16 in heavy trade as sentiment was also affected by the selldown on TIME DOTCOM BHD [].
At 11.08am, Time was down 6.5 sen to 45.5 sen with 22.81 million shares done. Time dotCom fell 11.5 sen to 65.5 sen with 61 million shares done after it announced a share capital reduction and consolidation exercise which discouraged investors.
RHB Research said in its technical outlook for Time that losing the support would aggravate the negative sentiment and drag the stock back to the 44.5 sen to 48 sen strong support region.
The research house said Time's share price was stuck at around the region of 44.5 sen to 48 sen in mid-July to August, but fell off the 44.5 sen support on a steep correction mode, prior to a stabilisation phase at around the 35.5 sen to 40 sen region in September 2010.
The stock staged a steep rally back to above the 45 sen level in early October, but was kept within a tight range from 44.5 to 48 sen until last Friday, when it launched a powerful rally from 44.5 sen to a high of 57 sen, before ending at 52.5 sen, with a huge bullish candle on the chart.
'It tried to resume the rally yesterday, but succumbed to heavy profit-taking activities, and closed the day at 52 sen, with a small negative candle. The candlestick pattern, accompanied by the downtick on the momentum indicators suggests a high chance of a further retreat in the immediate term,' it said.
RHB Research said moreover, counting from last Friday's high volume transaction, short-term retail investors will feel the impact of selling activities soon on T+3 factor come Thursday (Wednesday is a public holiday) if it fails to perform on Tuesday.
As a result, further weakness on Tuesday will force a revisit to the 50 sen important support level. Losing the support will aggravate the negative sentiment and drag the stock back to the 44.5 sen to 48 sen strong support region.
'At the same time, investors must also be aware that the ability to sustain at above 50 sen will reattract bargain hunting activities, hence flashing a chance to resume its upswing to above the 55 sen level. Next resistance is only seen at 64 sen,' it said.
At 11.08am, Time was down 6.5 sen to 45.5 sen with 22.81 million shares done. Time dotCom fell 11.5 sen to 65.5 sen with 61 million shares done after it announced a share capital reduction and consolidation exercise which discouraged investors.
RHB Research said in its technical outlook for Time that losing the support would aggravate the negative sentiment and drag the stock back to the 44.5 sen to 48 sen strong support region.
The research house said Time's share price was stuck at around the region of 44.5 sen to 48 sen in mid-July to August, but fell off the 44.5 sen support on a steep correction mode, prior to a stabilisation phase at around the 35.5 sen to 40 sen region in September 2010.
The stock staged a steep rally back to above the 45 sen level in early October, but was kept within a tight range from 44.5 to 48 sen until last Friday, when it launched a powerful rally from 44.5 sen to a high of 57 sen, before ending at 52.5 sen, with a huge bullish candle on the chart.
'It tried to resume the rally yesterday, but succumbed to heavy profit-taking activities, and closed the day at 52 sen, with a small negative candle. The candlestick pattern, accompanied by the downtick on the momentum indicators suggests a high chance of a further retreat in the immediate term,' it said.
RHB Research said moreover, counting from last Friday's high volume transaction, short-term retail investors will feel the impact of selling activities soon on T+3 factor come Thursday (Wednesday is a public holiday) if it fails to perform on Tuesday.
As a result, further weakness on Tuesday will force a revisit to the 50 sen important support level. Losing the support will aggravate the negative sentiment and drag the stock back to the 44.5 sen to 48 sen strong support region.
'At the same time, investors must also be aware that the ability to sustain at above 50 sen will reattract bargain hunting activities, hence flashing a chance to resume its upswing to above the 55 sen level. Next resistance is only seen at 64 sen,' it said.
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