On 4 Jan 2012, we advised traders to accumulate Genting's shares after the stock finally crackedabove the RM10.00-RM11.06 consolidation phase. Surprisingly, on the 5^thtrading day after its breakout, the stock actually retraced below the RM11.06level and triggered our cut-loss order. Even now, it is still consolidating thestrong gains chalked up in Oct 2011 but is trading  within a newconsolidation zone ranging  from  the RM10.00 to RM11.32 level. Traders can still accumulate the shares duringthis consolidation or wait for the stock to break out at the RM11.06 level asGenting is still in a good position to violate the RM11.98 historic peak. 

In retrospect, Genting rebounded sharply in October 2011after finding support at the 38.2% Fibonacci retracement level of the March2009-Dec 2010 rally. Since then, the stock has been spending time consolidatingthe strong gains recorded that month. It has been consolidating between theRM10.00 and RM11.06 levels previously, but due to the fake breakout from theconsolidation phase two months ago, a new consolidation zone ranging fromRM10.00 to RM11.32 has emerged.

The fake breakout triggered our cut-loss order.Nevertheless, traders can still accumulate Genting's shares now as it is still withinthe consolidation zone  and is in a goodposition to crack above the RM11.98 historic peak after creating a 'Long WhiteDay' at above the 38.2% Fibonacci level of the March 2009-Dec 2010 rally. Themore conservative traders may want to wait until a breakout occurs, but wethink it would be alright to accumulate its shares during the consolidationphase as its price action has been constructive since October's strong gains. Abreak above the consolidation zone is likely to see Genting surpassing theRM11.98 historic peak. Our cut-loss point is pegged at below the RM10.00 mark.

Hence, resistance lies at the RM11.32 and RM11.98 levels. Should the RM10.00 support  floor be violated, additional supports can befound at the RM9.00 and RM8.37 levels. As far as Genting's long-term technicaloutlook is concerned, it is still firmly bullish and the end of the currentconsolidation phase will see the stock extending its uptrend.

Source: OSK188