Topglov broke below its long term uptrend line at RM12.00 yesterday. That uptrend line stretches back to January 2009. In addition, we can see two other negative signs: the MACD entering into the negative territory (potentially a prelude to a sustained decline) and the 20-day SMA line cutting below the 50-day SMA line. We can also note that the RSI is beginning to enter into the 'oversold' territory, where a prolonged stay therein is a prelude for sustained decline. After a sharp fall this morning (to an intra-day low of RM11.18), Topglov has enjoyed a sustained rebound to touch RM11.96 as at 3.45pm.

So, we will wait & see whether the developing rebound can take Topglov back above the uptrend line support at RM12.00 & maybe to rectify the negative technical picture as painted by the indicators. Failing which, Topglov could have made a cyclical top & it could commence on its long-term downtrend shortly thereafter. In fact, a short-term downtrend has already started as seen by the presence of a lower 'low' & a lower 'high' (denoted as L1/L2 & H1/H2).


Chart: Topglov's daily chart as at May 6, 2010 (Source: Tradesignum)

If Topglov has made a top, then chances are that the other rubber glove makers could have made theirs or about to make theirs. After all, Topglov is the top dog in this industry.