Pecca Group Bhd (code: 5271) has been trading in a tight consolidation channel since the start of the month as investors await fresh leads.

       The stock made a slight advance yesterday but remained close to the 14-day simple moving average (SMA).

       The resistance of RM4.17 serves as the upper limit to the stock’s ongoing trading channel, which if taken out could signal the start of a rally.

       For a more convincing breakout, the share price will have to advance past the 50-day SMA overhead to signal the onset of strong bullish sentiment.

       Going by the daily turnover, interest in the stock remains subdued. A jump in buying interest could offer the positive momentum needed to break the share price out of its current inactivity.

       Looking at the one-year price chart, the counter maintains a bullish bias despite the recent profit-taking, which saw the share price descend from a historical trading high of RM4.73 on June 10.

       As such, there is a likelihood that the ongoing short-term consolidation will end with a break higher as the share attempts to resume the dominant positive trend.

       In the event of a crossing above the immediate resistance, the share is expected to head for a higher price target of RM4.54-RM4.73.

       There are bullish indications in the technical indices. The slow-stochastic has risen to 61 points while the 14-day relative strength index is ascending at 45 points.

       The daily moving average convergence/divergence line is also curving higher towards a signal line, a crossing of which would signal the onset of strong bullish momentum.

       Support for the stock is found at RM3.93 and RM3.65.

       The comments above do not represent a recommendation to buy or sell.