Stock to Watch: Uemland [5148]

Our index rose and tested the all-time high today but the overall sentiment remained bearish with losers outnumbered the gainers by more than 150 shares. Such a divergence in the index movement and true sentiment that happened in an uptrend tells us to stay away from the market if possible as the bears are still conquering the market. Having said that, there are still opportunities to profit, especially from the extreme movements of some shares. While most KLCI constituents are in green today, Uemland [5148] fail to stay strong as it slid by 13cents, putting the counter in the top 10 losers list.

uemland (1) (1)
After breaking above the rectangle in early March with high volume, share price of Uemland rose gradually within its upward channel by close to 70cents, representing a 30% rise. Just before reaching the psychological resistance of RM3, the share made a turn after touching a high of RM2.96 on the 8th of April and had since moving down. A lower high was formed on the 17th of April, providing the first confirmation of a downtrend. The bearish signal is further confirmed by the breach of the upward channel earlier this week and today we see the share price moved lower, dipping below its RM2.60 support with high volume. So what’s next? Is there any profit opportunity here?

While the stock is in a downtrend, several clear support/resistance levels that were created in the recent past provide us with good guidance to trade the swings of this stock. Given the absence of significant upwave in the recent downtrend, a technical rebound with significant gain is imminent after falling by close to 45 cents from its 1-year-high. Looking at the possible support levels, we might see the technical rebound at RM2.48/ RM2.47, which coincidentally is the Fibonacci 50% level from its RM2.96 high. Aggressive traders may consider participating at this level if price manages to stabilize at the support level or if a candlestick reversal pattern is formed. If price fails to hold its ground at the RM2.47 support level, it would move lower to its next major support level of RM2.30, at which the price is even more attractive since a technical rebound is even more likely to happen.

Do trade cautiously as the overall sentiment is still very bad.

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