Technical Pulse: Top Glove Corp Bhd October 14, 2020 293

Top Glove Corp Bhd (SGX: BVA) initial plan was to adopt a wait and see approach after the release of the 14th September report and the 2 weeks price movement indicate a potential correction to the downside of a possible double three corrective action or an expanding wedge formation. However, recent technical shows that a potential strong bullish impulse is building up:

  1. Top Glove has broken out of the pennant formation and the ascending triangle within. Hence, it is a clear signal that the stock is resuming its bullish upside.
  2. Since its rejection near $3.00 region on late September, the correction has been mild and prices is still able to find itself supported above $2.55. As such, Top Glove has gained significant momentum for the upside.
  3. The target price 1 and 2 are 161.8% and 200.00% extension level of the pennant and it is an attractive target levels should the immediate resistance zone at $3.00-$3.19 is broken.
  4. The 22-day moving average is attempting to cross above the 50-day moving average. Successful crossing will cement the short-term upside as it will form a bullish Golden Cross.

 

*Timeline of the trade is 3 weeks from the date issued.

*The resistance zone remain a clear immediate threat which needed to be cleared to confirm the uptrend. Otherwise, the support zone one in green will be the next best potential support.

 

CHART LEGENDS

Moving average

Blue dotted line = 50 periods Moving average

Green dotted line = 22 periods Moving average

avatar
  Subscribe  
Notify of

About the author

Profile photo of Chua Wei Ren

Chua Wei Ren
Technical Analyst
Phillip Securities Research Pte Ltd

Wei Ren specialises in Technical Analysis and has 9 years of experience in studying classic technical price action. He also study and research extensively on Elliott wave theory, Dow Theory and Supply & Demand strategies as he believes that history plays an important role in how the market is reflected in the future.

He graduated with a Bachelor of Economics and Finance from University of Murdoch.

Get access to all the latest market news, reports, technical analysis
by signing up for a free account today!