Stock Analysis with ChartNexus (version 2)

Malaysia

Gamuda

Gamuda is also a construction and building materials stock but its technical chart is different from WCT. Chart pattern formation suggests that a potential head and shoulders top is in place for Gamuda coupled with a decline in volume as the price moved higher. The MACD trend indicator remains weak below its signal line, trending down and it is hovering near the centerline (a move below zero - a bearish centerline crossover implies that momentum has changed from positive to negative). The MFI oscillator is bearish as it breaks below its diagonal support and remains below the 50% neutrality level. Immediate support will be at RM2.95 which is the neckline of the potential head and shoulders formation. Interestingly, it corresponds close to its 50-day moving average and the 23.6% Fibonacci retracement from its October 2008 low to its recent August 2009 high. A clear violation below its neckline support at RM2.95 shall see a downside breakout with a potential target of RM2.50 which is also the next classical support. Failure to hold shall see a further correction towards the next stronger support at RM2.13-RM2.10. Immediate resistance will be at RM3.23 follow by RM3.44-3.50. A break above it shall see Gamuda resuming its uptrend to test the next classical resistance at RM3.90.

This article first appeared in Smart Investor, September 2009

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