Charts tipped shares of Hi-P won’t remain in a correction phase and are set to head higher, Phillip Securities said in a note on Wednesday.
“Since hitting a record high of S$2.79 in March, price has been moving in a correction phase. Nonetheless, the long-term uptrend remains intact as the higher low (HL) point at S$1.79 in February held up,” Jeremy Ng, a technical analyst at Phillip Securities, said.
After the stock’s recent 33 percent selloff from a March peak, the relative strength index had also fallen into oversold territory on April 4, hitting a low of 28, and indicating it’s due to rebound soon, he said.
“After the RSI fell to a low of 28, price also found some support around the 61.8 percent Fibonacci retracement level and S$1.86 support area,” he said, adding the stock’s recent rebound has boosted the RSI above the 30 oversold region. That signals the start of a mean reversion into an uptrend, he said.
“With the recent bullish price action, expect price to head back into the uptrend next to retest the S$2.38 resistance area followed by S$2.65,” he said.
He tipped an entry price at S$2.15, a stop loss at S$1.78 and a take profit level at S$2.65. On the downside, he tipped support at S$1.86, followed by S$1.79.
The stock was down 0.94 percent at S$2.11 at 2:19 P.M. SGT on Wednesday.