KUALA LUMPUR (Jan 5): OSK Retail Research has advised traders to accumulate TAKASO RESOURCES BHD [] shares at above the 18 sen level and bet on an eventual breakout from the important long-term MAV line.
The research house said on Thursday that Takaso share price, after plummeting below the 200-day MAV line, has been consolidating sideways at below the moving average line.
OSK Research said the stock had since November 2011 experienced several failed breakout attempts at the 200-day MAV line accompanied by particularly high trading volume.
These attempts were supposed to push the stock beyond the moving average line, but somehow they met persistent selling pressure at this formidable resistance level.
On Wednesday, Takaso once again tested the 200-day MAV line with strong volume. There is a possibility that buyers may eventually overwhelm the sellers, resulting in a breakout from the moving average line.
“Because Takaso has been consolidating sideways at below the line for quite some time and it is still trying to crack above a critical long-term moving average line, a successful breakout would normally lead to lucrative rewards.
“Hence, we advise traders to accumulate the shares at above the 18 sen level and bet on a violation of the 200-day MAV line. Should this resistance line be violated, the upward momentum is expected to pick up strongly and might carry the stock to the 28 sen level, which is about the middle point of the “Long Black Day” created on Sept 6, 2011,” it said.
OSK Research said the cut-loss point is pegged at below the 17.5 sen level. From the current level, the immediate support is at the 17.5 sen to 18 sen level, followed by the 14.5 sen level.
“To the upside, beyond the 200-day MAV line, we are eyeing an additional resistance at the 25 sen level, followed by the 28 sen level. Meanwhile, the stock’s near-term technical outlook is obviously neutral and will turn bullish, once it manages to close at above the 200-day MAV line,” it said.
