China Sky - further near-term gains limited

We issued a TA on China Sky on 26 Aug highlighting a positive breakout - and since then, the stock has rallied more than 37% within 7 sessions. But from here on, the stock may find it difficulty to clear our next key resistance level at $0.28.

With the daily RSI already hovering at the overbought region, further near-term gains could be limited.

We have raised our immediate support level up to S$0.25 (protective stop level) resistance-turned-support. Should a correction breach this support, it could mean further bearish implications thereafter.

However, should it take out the $0.28 resistance, it may still face another resistance at $0.295 (gap zone in Jan '09), followed by $0.33 (minor peak in Dec '08).

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