Hyflux could be poised for more upside in the weeks ahead after breaking above the top boundary of its 6-month ascending triangle. It has also closed above the $2.00 key level (last seen in early Oct ’08) on heavy volume in yesterday’s trading session.
- The RSI has rebounded sharply off its 2.5-month uptrend line and MACD has made a bullish crossover after rebounding off its 6-month uptrend line; both suggesting a strong uptrend momentum. However, on a cautious note, we advocate waiting for a successful retest of this resistance-turned-support level which should further serve as confirmation of the breakout.
- Immediate support is pegged at $1.72 (recent troughs in Apr ’09 – May ‘09), ahead of $1.56 (gap zone in Mar ’09 and bottom boundary of ascending triangle).
- Should the breakout materialize, we expect an initial resistance at $2.40(key gap zone in early Oct ‘08), breaking which, we see the next resistance at $2.91 (Sep ’08 high and ascending triangle breakout theoretical price target).
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