MEGB may revisit its low at RM1.62

The rally for MEGB, which started in late March, ended in early April. Since then, it has dropping and it broke below the psychological cum horizontal support of RM2.00 on May 27. The stock tested the horizontal support at RM1.82-1.83 on May 30 & 31 and again yesterday & earlier today. If this support holds up, the stock may stabilize & recover. If not, it may revisit its mid-March low of RM1.62. The indicators are still weak.


Chart 1: MEGB's daily chart as at June 7, 2011_3.30pm (Source: Quickcharts)

From the daily chart below, we can see that MEGB broke above its accelerated downtrend line (R1-R1) in end March and put in a strong rally until it hit the downtrend line (RR). Since then, MEGB has been sliding in line with its prevailing medium-term downtrend (see the series of H-H1-H2-H3 & L-L1-L2-L3?). If the current short-term downtrend failed to go below the L2 at RM1.62, there is a good chance we may be see a bottom for MEGB. The recovery is not on the agenda just yet.


Chart 2: MEGB's daily chart as at June 6, 2011_plotted on log scale (Source: Tradesignum)

Based on the above charts, we should track this stock closely. If it revisits its recent low & failed to make a new low, I think we can consider buying for a rebound.