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On 27 Sep, I mentioned that "A support seems to have formed at 30c for this construction stock. Further upside would give a target of 32c." Today, Hock Lian Seng's share price touched a high of 32.5c before closing at 31.5c as volume exploded.
The MACD completed a bullish crossover in positive territory as the MFI spiked into overbought territory while the OBV turned up sharply. The RSI, however, is somewhat lukewarm and has yet to break out from a series of lower highs. This coupled with a white candle formed today with a long upper wick puts into question the sustainability of today's upmove in price. Interpretation: Strong demand and accumulation but buying momentum is muted by strong selling pressure at resistance (32c).
I sold some of my shares at the 32c target today. Although I still see strong support at 30c where we find the rising 20dMA, 30.5c could very well be resistance turned support. I would buy again if it gets to those levels. Immediate resistance remains at 32c and if that breaks convincingly, the next target is at 34c.
Related post:
Hock Lian Seng: 32c target.
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