LION Industries Corp Bhd (Lionind; Code: 4235) shares were on the rise since forming a “double bottom” pattern of 22 sen in late February last year following a long bearish move.
The healing process in the initial stage appeared volatile while the new-born bull engaged in a tug of war with the bear fighting to take control.
The battle lasted almost a year before the former emerged as the clear winner earlier this year and soon led Lionind higher in a steeper and a more steady pace, which witnessed prices mended to a high of 87 sen on March 16, the best level in almost 3½ years.
Thereafter, shares pulled back to a three-week low of 66 sen on March 27 in a brief correction owing to apparent profit-taking activity before bouncing off once again in the wake of a fresh bout of buying.
Consequently, Lionind shares returned to within striking distance of the recent peak, hitting a high of 86 sen in the morning session but gave up early gains later to finish one sen lower at 82 sen, as a lacklustre principal market performance simply was not supportive of the bulls yesterday.
Based on the daily chart, Lionind has carved out a mending course and although the bulls are expected to encounter initial challenges at the 90 sen hurdle, RM1 mark and at the next upper barrier of RM1.20, there is a high possibility prices may test the descending trendline of RM2.23 if they are given more time.
Elsewhere, the oscillator per cent K and the oscillator per cent D of the daily slow-stochastic momentum index were holding up well near bullish territory. It has issued a short-term buy on Thursday.
The past week saw the 14-day relative strength index (RSI) hitting a high of 72 on Thursday before retreating slightly to settle at the 68-point level yesterday.
Except for a minor curving down pictogram on the 14-day RSI, other indicators are painting a pretty promising landscape.
As for the downside, concrete support is pegged at the 66 sen line, of which a crack will have a negative impact on the outlook going forward.
The comments above do not represent a recommendation to buy or sell.
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