Digistar- may continue with its prior uptrend

Digistar is a company that has attracted a lot of interest as it has secured a few big contracts for the migration of television transmission from analogue to digital. It is reported to be in the running to secure a RM2 billion job from the Government. For more, go here.

Digistar is a profitable company, with net profit of RM19 million & turnover of RM98 million for FYE30/9/2011. For more, go here.

Digistar has been consolidating for the past 6-7 months after making a high of RM0.535 in June last year. The consolidation takes the shape of a saucer bottom. It enjoys support from the medium-term uptrend line (SS) while enduing pressure from a 3-fan downtrend line. Digistar appears to have broken above the 3rd fan line today at RM0.50, which is also a horizontal resistance. With this double breakout, Digistar is poised to test its recent high of RM0.535. If it can surpass that level, Digistar is likely to continue with its prior uptrend.

Based on good financial performance, exciting newsflow & positive technical outlook, Digistar could be a good trading BUY.


Chart: Digistar's daily chart as at February 3, 2012_9.30am (Source: Quickcharts)