A look at the stock chart of PCHEM Petronas Chemicals. Is it in an uptrend or downtrend? Where are the support and resistance?
PCHEM recently broke out of a trading channel. A stock that breaks out of trading channel is quite bullish. The rising 200 MA also points to more gains in the stock in the future. I would like to see this stock go a bit higher to have the top of the channel become an area of support.
For those who play the break out, they would have bought the breakout with a stop loss slightly below the low of the trading channel. Break out can often give good returns.
The weekly chart above shows that the stock has been in an uptrend for quite some time. There are resistance areas on the left but I think the tight consolidation in the weekly chart would have help to absorb some of the supply there. Thus if PCHEM continues to stay above the top of the trading channel, it is very likely to continue to move higher in the future.
Notice that the consolidation also happen at a previous high. Previous high can act as a support area and thus the consolidation itself if now a strong support area for the stock.
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