Airasia re-testing its low

On July 12, I've posted a stock alert calling a SELL on Airasia after the stock broke below its horizontal support of RM1.44/1.45. Todate, that is the only SELL recommendation that I have made. I would like to confine SELL calls to stocks that I've called a BUY earlier. Nonetheless, I made an exception for Airasia because there have been many inquiries on this stock from my clients.

Since the call was made, the stock has dropped to a low of RM1.28 before recovering to a high of RM1.40 on July 24. Thereafter, the stock has dropped again. This morning, it made a low of RM1.29 with the bulk of the trading done at the RM1.30/1.31 levels. Airasia appears to be doing a test of the low and, if the stock does not made a new low, we can expect the stock to recover from here. Some may like to buy into Airasia at this level but the safer entry level would be at RM1.40. The latter represents the downtrend line resistance for the stock. A break above that line would mean that a new trend (maybe, uptrend or sideway) will replace the current downtrend.



















Chart: Airasia's daily chart as at July 25