SKPetro has dropped sharply over the past 2 days prompting concern that something are not right with the stock. However when you look at the chart, you will see that the stock has risen substantially over the past 4 months from a low of RM3.20 to a recent high of RM4.90. It is quite normal for a stock to give back some of its recent gain. As at this posting, SKPetro was trading at RM4.52-4.53. This is fairly near to the uptrend line, SS as well as the horizontal line at RM4.50. If the share price can stay above this level, a rebound may come quite soon. However, if the share price were to break below the RM4.50 mark, then you can expect a long consolidation.
Based on technical consideration, SKPetro could be coming to a good entry level, provided it does not break below the RM4.50 mark.
Chart : SKPetro's weekly chart as at Jan 2, 2014 (Source: tradesignum)
Note:
In
addition to the disclaimer in the preamble to my blog, I hereby confirm
that I do not have any relevant interest in, or any interest in
the acquisition or disposal of, SKPetro.
thanks for the reasoning, Alex.
ReplyDeleteI was just wondering, in what kind of situation would you use trendlines, horizontal support/res, or pivot points?
thank you.