LION Industries Corp Bhd shares pulled back from the recent top of RM1.74 on August 6 to a low of RM1.21 on Nov 30 owing to profit-taking activity. Thereafter, they traded sideways briefly before bouncing off in the wake of fresh bargain-hunting buying momentum, pushing prices to a one-month high of RM1.37, up five sen yesterday.
Based on the daily bar chart, Lion Industries remained in consolidation mode despite the recent recovery, but it has immense potential to come out of it, as trading volume was seen piling up once again over the past several days, implying investors are making a comeback to this stock.
Further supporting the fact, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index retained the bullish note. It flashed a short-term buy on Dec 23.
Likewise, the 14-day relative strength index improved sharply from a reading of 26 on Dec 21 to the 73 points yesterday.
Also, the daily moving average convergence/divergence histogram continued to mend in tandem with the daily signal line after triggering a buy on Dec 7.
Technically, indicators and chart developments suggest more advances in the pipeline. If prices can overcome the pivotal overhead resistance of RM1.40, also the short-term descending line and move forward to clear the important 100-day simple moving average of RM1.45, a new rally to the RM1.74 or higher can be expected.
Initial support is seen at RM1.30, followed by the RM1.21 level. — By K.M. Lee
