Gamuda just broke its uptrend line at RM3.60

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.