KUALA LUMPUR (Nov 25): OSK Research said KNM faced immense selling pressure after releasing its 3QFY11 financial results which showed a net loss of RM116 million.
“Yesterday’s price action resulted in the violation of the major lower support level of RM1.28,” it said on Friday.
OSK Research said unless the price stabilizes in the vicinity of the RM1.28 level, it may retrace further in the near future after violating this critical support level.
The next strong support level, though not as crucial as the RM1.28 level, could be seen at RM0.85.
The research house said the RM1.28 low created in 2009 is a crucial level for KNM. First of all, it was the bottom for KNM’s share price during the Global Financial Crisis. Secondly, the price was again supported by the RM1.28 level in September 2010, which provided the base to eventually propel it to the RM3.28 level.
“When the bottom for a major previous bear market is violated, this implies significant weakness,” it cautioned.
OSK Research said as Thursday was only the first day that the RM1.28 level is violated, it would need to observe if KNM could start stabilising in the vicinity of this level.
If the RM1.28 level is decisively violated, this simply means that the stock will likely face further selling pressure in the near future. Moreover, its monthly RSI is now trading at the 34-pt level, which means that the door is still open for additional losses before reaching the standard 20-pt oversold level.
The research house said the RM1.00 mark now represents the psychological support level for the stock.
“We would need to look back as far as 2006 to search for the next stronger support, which could be detected at the RM0.85 level.
To the upside, now expect the RM1.28 level to be a formidable resistance, with the next major resistance situated at the RM1.56 level,” it said.
“Yesterday’s price action resulted in the violation of the major lower support level of RM1.28,” it said on Friday.
OSK Research said unless the price stabilizes in the vicinity of the RM1.28 level, it may retrace further in the near future after violating this critical support level.
The next strong support level, though not as crucial as the RM1.28 level, could be seen at RM0.85.
The research house said the RM1.28 low created in 2009 is a crucial level for KNM. First of all, it was the bottom for KNM’s share price during the Global Financial Crisis. Secondly, the price was again supported by the RM1.28 level in September 2010, which provided the base to eventually propel it to the RM3.28 level.
“When the bottom for a major previous bear market is violated, this implies significant weakness,” it cautioned.
OSK Research said as Thursday was only the first day that the RM1.28 level is violated, it would need to observe if KNM could start stabilising in the vicinity of this level.
If the RM1.28 level is decisively violated, this simply means that the stock will likely face further selling pressure in the near future. Moreover, its monthly RSI is now trading at the 34-pt level, which means that the door is still open for additional losses before reaching the standard 20-pt oversold level.
The research house said the RM1.00 mark now represents the psychological support level for the stock.
“We would need to look back as far as 2006 to search for the next stronger support, which could be detected at the RM0.85 level.
To the upside, now expect the RM1.28 level to be a formidable resistance, with the next major resistance situated at the RM1.56 level,” it said.
