This counter had recently rallied and closed at a high of RM1.75 on October 23, 2017. What followed in the subsequent days were 2 straight days of profit taking. This was evident by the 2 significant black bodied candles which closed lower until October 25, 2017. 

Refer Picture 1 below on the technical chart of HeveaBoard.

Picture 1:HeveaBoard Chart 25/10/2017

For any investor, testing a high 3 times at RM1.75 in 3 months would be an important indicator of a potential change in trend. 

Currently, HeveaBoard is trading at an important price "zone" - immediate medium term support level of RM 1.62. 

Knowledge sharing
For all support/resistance levels, there is a +/- variance of approximately 1% from the support line indicated. Hence, support at RM 1.62, can be interpreted as support at RM1.61 or RM 1.63. 

Can the support zone hold?

Probably, because prices retraced about 50% from its previous rally. Note that the previous rally began in the highlighted RED rectangle - September 2017 - in Picture 1 above. Also note that the current retracement to RM 1.64 is a 50% retracement from its previous rally; in Fibonacci terms, it has retraced to a healthy level for prices to continue on its uptrend. 

In my opinion, the consolidation zone in the highlighted RED rectangle in September 2017, was a healthy consolidation zone which led to a breakout on October 11, 2017. 

Key Support Levels:
S1: 1.62
S2: 1.59
S3: 1.55

Key Resistance Level:
RM 1.75

USD vs MYR
Since my last review of Hevea, the USD has appreciated against the MYR from 4.2050 (12 September 2017) to 4.2352 (25 October 2017). This does not immediately improve the results of Hevea's Q3 2017 results, but this is a sentiment booster for exporters like Hevea. 

Picture 2: USD vs MYR (25/10/2017) 

So what's up for us?
I will be monitoring this stock for some time. However, the zone in which Hevea is trading at deeply intrigues me. If the support level holds, no issue. But if prices break below support, I will probably look to add my position. 

Key Risks
For me, it would definitely be market sentiment. Despite price action showing some promise, if overall market sentiment is bearish, Hevea's prices may be pressured lower. Check out my analysis of FBMKLCI's bearish sentiment lately HERE.

Final Thoughts
For those who are wondering when is Hevea's next quarterly announcement for Q3 2017, it will be at the end of November. 

I strongly encourage those who want to know more about the FUNDAMENTALS of HeveaBoard to check out my analysis HERE.


Note: This is not a recommendation to buy or sell this stock by the writer. The writer owns shares in this company. The writer intends to share his view point on this stock's potential investment value, any decision to invest or sell shares in this company is entirely at the reader's own risk.