Please be reminded that this is NOT a ”pump and dump” motivated article nor a recommendation. It is just my comprehensive studies on this interesting company. Please seek advice from licensed investment representative for the recommendation!
Everything in the world has up and down. After seeing a strong rally in Minetech for 3 weeks, there could be a potential peak in the share price and turn into a correction! This signal could be identified in the hourly charts (1-hour and 2-hour) to catch the early reversal sign.
Although the share price "may continue" to go up to test the psychological level of 30sen, this could be the way the operator lure retailers to purchase his shares. Those who have the shares might be lucky to sell their shares at a price high of 29sen or 30sen. BUT those who doesn't have the shares yet could fall into this trap!
In fact, a new amount of shares acquired by the Chairman, Dato' Awang Daud have reduced when the share price got higher. Therefore, Dato' Awang Daud could be happier when the potential correction in the share price come for him to buy more aggressively at cheaper prices rather than buying at 29-30sen! He doesn't buy stakes in the company for 1 month huge profit but to execute his long-term plan!
As shown in the charts below, a negative divergence has appeared. A "negative divergence" happens when the share price is in an uptrend while major indicators are in opposite direction. This indicate a potential reversal in recent share price movement.
In this case, Minetech is in an uptrend while DMI+ (blue line - buying momentum), MACD histogram (leading indicator) and Money Flow Index (money movement into and out of stock) (MFI) are all showing in a downtrend.
Buying momentum has weakened, MACD histogram has narrowed down to zero line and might turn into a bearish zone and the downtrend in the MFI indicates the operator have started to take profit and moved out the money from the stock and go back to support levels! The ADX (pink line) in the DMI panel chart has also seen trading above DMI+, meaning that the stock is overbought!
https://klse.i3investor.com/blogs/fatprofitstock/2020-04-18-story-h1506018435-THE_RALLY_IN_MINETECH_IS_A_TIME_BOMB_AND_A_TRAP.jsp
