RHB Research: Evergreen to test RM1.75 resistance soon

-A +A

KUALA LUMPUR: RHB Research said it expects Evergreen Fibreboard to rechallenge the overhead resistance near RM1.75 soon.

It said on Monday, March 22 that clearing RM1.75 will mark an important bullish breakout on the chart, and points to a further rally towards the next upside targets at RM1.86 and RM2.04.

"Any weakness should be capped at RM1.59, with additional support seen near the 10-day and 40-day SMAs at around the RM1.51 to RM1.57 region," it said.

To recap, Evergreen Fibreboard's recovery momentum accelerated after piercing through the RM1.10 resistance hurdle in October 2009.

However, immediately after running into a strong resistance near the RM1.59 level, its share price slipped into a consolidation phase and retreated to RM1.26 low in late December.

Thereafter, it recovered steadily to a high of RM1.76 in Jan 2010, before another round of profit-taking activities kicked in following its failure to retake the RM1.75 hurdle.

But backed by a firm support at RM1.34, it regenerated a mild recovery leg recently. In fact, its recovery momentum increases lately and ended at RM1.65 on Friday, a day after a successful removal of RM1.59.

Technically, it closed with three positive candles in a row, suggesting a strong chance of a follow-through recovery mode ahead. Underpinned further by the robust turnover as well as the improved short-term momentum readings, this will pave way for a rechallenge of the overhead resistance near RM1.75 soon.