Petra Perdana may test RM1.70 resistance

 

SHARE prices on Bursa Malaysia last week continued to trade within the confines of their recent consolidation bands. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) continued to stay above its critical support of 1,250 points when it closed at 1,263.94 on Thursday.

Key heavyweight index-linked counters continued to play pivotal roles in maintaining the FBM KLCI above its critical support of 1,250.

The FBM KLCI fell from its intra-week high of 1,267.73 down to its intra-week low of 1,255.66 last Monday, giving an intra-week trading range of 12.07 points. The benchmark index posted a week-on-week loss of 3.03 points, or 0.24 per cent.

Among other indices, the FTSE Bursa Malaysia Small Cap Index gained 48.23 points, or 0.49 per cent, to 9,882.98 while the FTSE Bursa Malaysia ACE Market Index added 5.03 points, or 0.12 per cent, to 4,200.53 on Thursday.

On the foreign front, market sentiment on Wall Street remained firm ahead of the Christmas holidays last week. The Dow Jones Industrial Average closed at 10,520.10 points on Thursday, giving a week-on-week gain of 191.21 points, or 1.85 per cent.

The tech stock heavy Nasdaq Composite Index rebounded in step with the general market trend. The Nasdaq Composite Index closed higher at 2,285.69 on Thursday, giving a week-on-week gain of 74.00 points, or 3.35 per cent.

Hong Kong stocks, meanwhile, rebounded ahead of the Christmas holidays. The Hang Seng Index closed higher at 21,517.00 on Thursday, giving a week-on-week gain of 341.12 points, or 1.61 per cent.

The Tokyo stock market continued to stay above the critical support of 10,000 points last week. The Nikkei 225 Index closed marginally higher at 10,494.71, recording a week-on-week gain of 352.66 points, or 3.48 per cent.

On Bursa Malaysia, Petra Perdana Bhd staged a technical rebound. Its daily price trend rebounded to close at RM1.41 on Thursday, posting a week-on-week gain of 15 sen, or 11.90 per cent.

The following are the readings of some of its technical indicators:

Moving Averages: Petra Perdana's daily price trend stayed below all its 20-, 30-, 50-, 100- and 200-day moving averages. Following the technical rebound last Thursday, Petra Perdana's daily price trend stayed above its 10-day moving averages.

Momentum Index: Its short-term momentum index continued to stay above the support of its neutral reference line last week.

On Balance Volume (OBV): Its short-term OBV stayed below the support of its 10-day moving averages.

Relative Strength Index (RSI): Its 14-day RSI had since stayed below the 50 level. Its technical reading stood at the 35.98 per cent level at the market close last Thursday.

Outlook

Petra Perdana was in the corporate limelight over the proposed disposal of the remaining 29.59 per cent stake in Petra Energy Bhd. An interim ex-parte court order was obtained to restrain any party from disposing of the stake until an interparty hearing on January 11.

Chartwise, Petra Perdana's monthly price trend traced out a re-test of its downside support traced out between October 2008 and March 2009.

Its weekly price trend staged a re-test of its immediate downside support (See Petra Perdana's weekly price trend A3:A4). Its weekly price trend contined to stay below its intermediate-term downtrend (A1:A2).

Petra Perdana's daily price trend continued to stage a technical breakout of its short-term downtrend (See Petra's daily price trend B3:B4) last week. With that, its daily price trend traced out a positive divergence (D1:D2 and D3:D4) to that of its daily Moving Average Convergence Divergence indicator (MACD).

Its daily fast MACD continued to stay above daily slow MACD last Thursday. Its weekly and monthly MACDs continued to stay below the respective slow MACDs.

Its 14-day Relative Strength Index (RSI) stood at the 35.98 per cent level last Thursday. Its 14-week and 14-month RSI were at the 27.48 and 3.46 per cent levels respectively.

Following the technical breakout of the short-term downtrend (B3:B4) on its daily price trend and the bullish configurations of its daily MACD, Petra Perdana's daily price trend has an even chance of staging a follow-through rebound to rechallenge its previous resistance high of RM1.70.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.