Post the bloodbath Monday, the local benchmark index, FBMKLCI, experienced a short-lived of upwards upon the opening of market by surging 13 points in the first 30 minutes to a high of 1,544.00. It was then slipped to 1,537.63 and closed 6.71 points higher as compared to Monday. From charting perspective, the stock could be well-supported above TrainYew’s SuperTrend. While the upward momentum could be weakening as per the lower peaks of Relative Strength Index (RSI), a rebound towards 1,570/75 is still likely should the FBMKLCI prove able to climb and stay above 1,545/40-support convincingly.
Broad market wise, the market breath is better with gainers outpacing losers (629 vs 404). There were 434 counters unchanged while 809 counters untraded. Improvement was seen across the board except for utilities, consumer products & services and health care.
The top performance sector led by technology, plantation, and energy. Technology sector has seen a broad-based rebound with the top mover of HONGSENG (0041), DNEX (4456), and IRIS (0010). DNEX has no major development while IRIS continued to see its insider accumulating its position since 22 Oct 2021. As for HONGSENG, a newly restructured segmentation from information technology and search and advertising to healthcare businesses, it has been on the radar for sometimes. Via its subsidiary, HONGSENG will invest RM3 billion in Kedah Rubber City (KRC) to build the world’s largest glove factory starting next year and it is expected to be completed in 2024 with a full production capacity of 960 kilo-tonnes of gloves a year. At a press conference after the symbolic ground-breaking ceremony for the nitrile butadiene rubber (NBL) manufacturing plant construction project, its Group Managing Director Datuk Seri Teoh Hai Hin said the plant was expected to attract additional investment of RM5 billion through the support industry and the nitrile rubber industry value chain.
Chart-wise, while the stock could have staged a Volatility Breakout and our TrainYew’s Trading System has issued a “Positive Signal”, investors should be aware that the momentum oscillator such as RSI is in the midst of tracing out a “Bearish Divergence”. Hence, sudden pullback is still likely. Nonetheless, the stock is trending up nicely above the TrainYew SuperTrend support. Immediate support is seen at RM3.65/60 and RM3.30 next.
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