At 10.20 am, Gamuda broke its uptrend line that stretched back to June 2006. That uptrend line support was at RM3.60. Earlier at 9.35 am, it broke its strong horizontal support of RM3.74-76 level. The next strong horizontal support is at RM2.95-3.00.
Chart: Gamuda's weekly chart as at February 22, 2008 (courtesy of Quickcharts)
Many would be very tempted to buy this stock for a quick recovery. As a technical trading rule, one should avoid buying into a stock that had suffered the kind of breakdown that Gamuda has just sustained.
Gamuda was recommended as a BUY in July 2006 (go here). Since then, the share price has more than doubled. The present share price has been adjusted for a 1-for-1 bonus issue that was completed in October last year.
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