Monday, December 12, 2011

OSK Retail Research: Emico may trade higher, support at 27 sen

KUALA LUMPUR (Dec 12): OSK Retail Research said Emico Holdings' share price may trade higher after closing firmer last Friday.

It said on Monday the stock has been trending higher since spiking up in early November. After failing to break above the 45 sen resistance level, a correction phase has set in.

'But the stock appears to have found support at 27 sen, which held for the past eight days. That is also the 62% retracement level of the November surge. The second leg of rally may have resumed last Friday after the price closed at its highest in 10 days, above the psychological 30 sen.

OSK Research said the 'Long White' candle formed on high volume suggests the conviction of buyers.

The research house said buying could be made above 27 sen, with a close below as a stop.

'As strong move could see it testing 55 sen, a measured move based on the November spike up, but two resistance levels stand in the way,' it said.

OSK Research said the first is 35 sen, the high of Nov 25, which is also the 38% retracement of the November surge, and followed by the November high of 40 sen.

A close below 27 sen will invalidate the trade, with a close below the Nov 22 low of 24 sen as the confirmation.

'If so, look for the stock to continue its long-term downtrend move,' it said.

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