Market expectations that the earnings of small cap drug manufacturers are recovering and HOVID is one of the beneficiaries of the latest round of National Key Economic Area (NKEA) Healthcare initiatives managed to spark investors’ interest in the stock over past few days. In fact, the accumulating buying interest causes its share price to break out from the “Bullish Flag” chart pattern. Key momentum indicators also switching from bearish to bullish mode, with the MACD just crossed over the Signal line. All signals have led us to believe that HOVID is poised for another upwards movement, making its way up to RM0.40. Traders looking to buy into the stock should aim to lock in their gains 3 bids below this targeted level (RM0.385). Meanwhile, a protective stop-loss should also be placed just below the Flag support at RM0.33.

 

Source: Kenanga