Coastal Contracts Bhd Weakness Ahead

Coastal Contracts Bhd has been in a trading range between RM 2.4 and RM 2.1 for the past few months.  It’s stock price has bounced off the lower boundary of the 20 day Bollinger band.  The 20 day moving average is sloping downwards and will act as resistance for any up move.  This resistance is currently at RM 2.2.  The 2 day RSI is approaching overbought levels.  This coupled with the fact that the MACD indicator is still below its signal line implies that the stock is unlikely to stay in overbought levels for long.   The stock is unlikely to break the RM 2.2 resistance level and a test of RM 2.1 is likely in the next few trading session.  

Coastal Contracts Bhd - Moving Up

Commodities have a bright future given the fact that further quantitative easing in US will ultimately lead to inflation. This means that there is further catalyst in the pipeline for commodity price to move up.

Companies like Coastal Contracts Bhd looks set to benefit from the commodity up tick. The stock price has been moving in a consolidation range and is now close to the RM2.40 resistance level. ADX is beginning to move up and this coincides with the gain in momentum.

MACD indicator has moved above its signal line and stochastic chart is still in bullish territory. I will look to buy the counter if it manages to break the RM2.40 resistance level. Support is at RM2.20 level.