HIAPTEK ... Jul11

AFTER a period of correction process, Hiap Teck Venture Bhd staged a steep rebound in the wake of renewed bargain hunting interest, which witnessed the shares hitting to a near six-month high of RM1.18 during intra-day session before reversing to finish down nine sen to RM1.05 yesterday.

The recent recovery was backed by encouraging trading volumes and it came after prices had re-tested the 20-month lows of 91 sen on July 14 to form a “double-bottom” pattern.

This stock had penetrated the 14-day simple moving average (SMA), 21-day SMA, 100-day SMA, as well as the 200-day SMA on our radar screen, but we could not confirm that the prevailing trend has shifted to bullish just yet as the mid-term descending line remains intact. The outcome may be known soon and investors should take note that a decisive penetration of the mid-term descending line of RM1.18, also yesterday's intra-day peak, will signal a positive turnaround.

The oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were fast reaching the overbought area after issuing a buy signal on July 14. Elsewhere, the daily moving average convergence/divergence histogram continued to expand positively against the daily trigger line to retain the bullish note. The 14-day relative strength index retained the bullish posture, fluctuating around the 80-86 points band.

Analysis suggests that if the recent buying momentum is genuine and sustainable, a positive breakout will come about soon, which may see prices scaling higher on bullish-extended mode.

To the upside, stiff resistance is expected at the RM1.57 mark, which is the previous major rally peak. Stop-loss exit is pegged at the 90 sen line.