KUALA LUMPUR (Feb 21): OSK Retail Research said the expected rally of WIJAYA BARU GLOBAL BHD []’s share price may have finally started following the break out from the sideways range last week.
It said on Tuesday that Wijaya was one of the stocks featured in its Daily Trading report in December last year.
“The stock was expected to trade higher after closing above the mid-2011 high on a daily basis. However, the expected rise did not materialise and the stock traded sideways at the high level instead.
“The resumption of the uptrend may have finally started after it closed above the psychological 80 sen last Friday,” it said.
To recap, OSK Research said the long-term downtrend since reaching the highs of 2005 appeared to have ended by the price surge in mid-2011, closing above the 2010 high.
This upward bias was reinforced by the subsequent shallow correction – 50% of the mid-2011 rally – and the rising 50-week MAV line.
The change of trend was finally confirmed by the 52-week high close in Dec 2011. However, the 80 sen price level proved to be a tough resistance to break and the stock traded sideways for the next two months instead.
The breakout finally happened last week when it closed above 80 sen for the first time on a weekly basis. It was followed by a higher close on Monday and another close above 80 sen this Friday should confirm the breakout.
“Thus, the stock is expected to rally further and positions can be initiated at the current level or on pullback,” it said.
OSK Research said a close below 76 sen could be a stop level, as this price level withstood four tests in the past two months.
A measured move based on mid-2011 rally could see the price trading at RM1.10, also the high of 2003 and 2004. If broken, resistance is expected at the prior support of RM1.40 and a stronger one at RM1.80, the high of 2005 and 2007.
OSK Research said the trade will not pan out if the stop loss is triggered. Look for the stock to trade lower instead and a close below the September-low of 50 sen will likely spell the end of the eight-month rally.
It said on Tuesday that Wijaya was one of the stocks featured in its Daily Trading report in December last year.
“The stock was expected to trade higher after closing above the mid-2011 high on a daily basis. However, the expected rise did not materialise and the stock traded sideways at the high level instead.
“The resumption of the uptrend may have finally started after it closed above the psychological 80 sen last Friday,” it said.
To recap, OSK Research said the long-term downtrend since reaching the highs of 2005 appeared to have ended by the price surge in mid-2011, closing above the 2010 high.
This upward bias was reinforced by the subsequent shallow correction – 50% of the mid-2011 rally – and the rising 50-week MAV line.
The change of trend was finally confirmed by the 52-week high close in Dec 2011. However, the 80 sen price level proved to be a tough resistance to break and the stock traded sideways for the next two months instead.
The breakout finally happened last week when it closed above 80 sen for the first time on a weekly basis. It was followed by a higher close on Monday and another close above 80 sen this Friday should confirm the breakout.
“Thus, the stock is expected to rally further and positions can be initiated at the current level or on pullback,” it said.
OSK Research said a close below 76 sen could be a stop level, as this price level withstood four tests in the past two months.
A measured move based on mid-2011 rally could see the price trading at RM1.10, also the high of 2003 and 2004. If broken, resistance is expected at the prior support of RM1.40 and a stronger one at RM1.80, the high of 2005 and 2007.
OSK Research said the trade will not pan out if the stop loss is triggered. Look for the stock to trade lower instead and a close below the September-low of 50 sen will likely spell the end of the eight-month rally.
