Mudajaya's share price has been trading sideways since late April, forming a trading channel in the process. Being news driven to a large extent, the share price ran up from its recent lows of RM2.50 to retest the upper trend resistance of RM2.80 yesterday before bouncing off with equal tenacity during the day. At these levels, we expect some degrees of profit taking amid the conventional ("technical") wisdom that the share price may return to the support line at RM2.55. On the flipside, the MACD has just managed a positive crossover with the signal line, hinting that the upward momentum may continue. Should a breakout occur, further gains may be expected towards the measurement objective of RM3.15.

The share price is also in the midst of retesting the long term resistance line on the weekly chart. The immediate  trend remains downward although an upside breakout will serve as  a significant game changer (with a huge upside potential should the breakout occur). At this point, the Stochastic indicator has just emerged from oversold levels and is now hooking upwards, highlighting this possibility. We reckon that from a technical standpoint, Mudajaya may be a stock to watch over the next few days as a move in either direction will not be subtle.

Source: Kenanga