The past two months' pullback in the overall market had caused LAFMSIA to lose as much as 20%. However, the share price is now beginning to show signs of an oversold rebound. Yesterday, the share price was up by 56 sen (RM8.46) and formed a "Marubozu" candlestick. More importantly, this bullish move confirmed the earlier "Inverted Hammer" candlestick, which preludes a reversal. As for the momentum indicators, the Stochastic and RSI have both emerged from an oversold state. Taken in combination, we believe that the technical picture favours the upside from here. We anticipate a sharp rebound towards the RM9.02 resistance (R2), and possibly RM9.40 (R3) next.

 

Source: Kenanga