Supportline – DIALOG
04 July 2019
Source: The Star
DIALOG Group Bhd broke out of a consolidation channel on Tuesday to resume an uptrend.
Advancing on rapidly rising momentum, the share price hit an intra-day high of RM3.39.
This pulled the share price clear of the key simple moving averages (SMA) that has converged in the RM3.25 to RM3.30 price range, suggesting improved sentiment over the stock.
The moving averages are also ascending, indicating a lift for the share price.
Meanwhile, the 100-day SMA is on course for a positive crossing with the 200-day SMA, which will complete a "golden crossing" formation on the daily price chart.
Supporting this positive development on the price chart is the technical indicators, which are suggesting an optimistic outlook.
The slow-stochastic momentum index is rising at a rapid clip at 55 points.
This growth in momentum is also reflected in the 14-day relative strength index, which has spiked into overbought conditions at 80 points. Given its current vertical trajectory, the index looks likely to push higher in extended overbought mode.
The daily moving average convergence/divergence line is also looking bullish, having just crossed the signal line to signal the start of a positive trend.
At its current trading level, the share price is yet to surpass May's trading high of RM3.42, and test the overhead resistance of RM3.46.
While the resistance may serve to trigger profit-taking, a sustained uptrend may result in a positive crossing and a challenge of the next resistance at RM3.66, last achieved in September 2018.
Support for the stock is pegged to RM3.22, which represents the floor of the recent trading channel and meets the 200-day SMA. Futher support rests at RM3.10.