IN line with the rebound on Bursa Malaysia over the past month, Notion VTEC Bhd (code: 0083) has been making a steep recovery in its share price.
Since hitting a low of 41 sen on March 20, the stock been on a rapid upward climb to form a V-shaped recovery. At Friday’s closing, the semiconductor counter had crossed above the 50% Fibonacci retracement level to erase half its losses from the recent sell-off.
The share price also crossed above the 50-day simple moving average (SMA), which suggests improving sentiment in the stock.
The stock is also pacing further away from the rising short-term 14- and 21-day SMAs, reflecting growing strength in the short-term trend.
Some further advances in the coming days would see the share price overcome the uppermost 100-day SMA as it makes its way towards the next significant retracement level of 61.8% at RM1.
Given the rapid rise of the share price in recent weeks, the technical indicators are reflecting bullish momentum. However, there are also signs of the stock being overbought, which could lead to some consolidation pressures ahead.
The slow-stochastic momentum index has reached into overbought territory at 82 points but continues to ascend, indicating that for now, it could travel in extended overbought mode.
This is reflected also in the 14-day relative strength index, which has risen to overbought conditions at 79 points.
A positive trend has been confirmed by the daily moving average convergence/divergence line, which has risen above the zero line. Given the return to a bullish trend, a retreat in the share price could be seen as a temporary breather before it continues the rally.
Resistance can be see at the RM1 and RM1.15 markets while support for the stock is pegged to 78 sen and 64 sen.
The comments above do not represent a recommendation to buy or sell.
https://www.thestar.com.my/business/business-news/2020/04/18/eye-on-stock-notion-vtec
