Stock to Watch: Glomac [5020]

Opportunities for day trading are getting scarcer. With foreign funds began to offload their massive holdings since last week, coupled with the weak performance of the regional markets, our local bourse is expected to move sideway/lower in the near-term. The 1765 support is a crucial level to watch for as a breach will lead the composite index lower, which will definitely cause a round of sentiment-based selling across all shares. While most shares are gradually reversing, some are consolidating and are waiting for the right moment to move to higher grounds. Glomac [5020] could be one with such upside potential.

After completing 3 upwaves since 6th of May, Glomac’s share price retraced before rebounding at RM1.28. The high of RM1.41 was tested again on the 29th of May but share price failed to stay up high. The formation of a long black candlestick on the 30th of May provided us with a bearish signal (especially when it appears after a reversal pattern occurs. In this case, its the double top) and thus we should expect the share price to move below the most recent swing low (RM1.26). But instead of moving lower, share price of Glomac managed to stay above the low of 30th May in the past 3 days. The existence of an “invisible hand” that prevented the share price from moving lower tells us that the market – or rather someone – is supporting the share price, which indicates bullishness. By joining the lows and highs of the past 2 weeks, a triangle can be drawn. Such a formation, combined with the steep upward movement of the share price before it consolidated, can be considered as a bullish pennant.  Using the flagpole to estimate possible target price (doesn’t work very well), this share is expected to rise by another 45 cents once the triangle is broken (upward, of course). Support is at RM1.30 and RM1.28 respectively. Do cut loss if the trade doesn’t work as planned.

*Notice I have a few 3′s in the article. This is in accordance to Gann’s number of 3, which indicates possible changes*


2 Responses to Stock to Watch: Glomac [5020]

  1. temuai says:

    Sir, how you see market volume? Seem its to low at this moment.

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