Yesterday PMetal broke above the horizontal line at RM5.00. This bullish breakout could send the share price higher to challenge the horizontal lines at RM5.20 or RM5.35 or even the all-time high at RM5.75. What could possibly explain the surge in the share price for PMetal?
Chart 1: PMETAL's daily chart as at Oct 4, 2018 (Source: Malaysiastock.biz)
For answer, you have to look at the price of aluminium. This metal surged on October 3 to a high of USD 2237. Yesterday, it went up further to an intraday high of USD2266 before correcting back to close at USD2170. The chart shows that aluminum has tested the line connecting the peaks for the past 9 months and corrected back. I believe the metal is likely to continue to correct for the next few days or weeks.
Chart 2: Aluminum daily chart as at Oct 4, 2018 (Source: Investing.com)
Based on the above, I believe that it is a good time to take some profit on PMETAL as well as other aluminium stocks (especially ALCOM). Good luck!
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