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Midas Could See A Short-Term Technical Pullback
Trend Spotting | 14 February 2013
Related stocks:
5EN
By: Xavier Lim
Articles (51) Profile

Midas’ share price has been performing well over the past few months on the back of the securing of new orders by the company and its associate. Year-to-date, Midas has secured two contracts totaling Rmb1.048 billion. Based on media reports, the Chinese government is expected to spend approximately Rmb600 to Rmb650 billion in railway investments this year. As the market believes that Midas is well-positioned to benefit from the China economic recovery, which would be driven largely by infrastructure investments and domestic consumption, its share price is likely to continue to trend upward.

Source: 1-year period daily chart for Midas

Looking at the technical picture, a bearish divergence between Midas’ share price and the Relative Strength Index has formed over the past few weeks. In addition, Midas seems to be forming a mini head-and-shoulders pattern. These signaled that Midas is likely to face a pullback in the near term. Immediate support level is around $0.54, and piercing through that price will see the next support level at $0.52. Nevertheless, Midas is still in the uptrend channel, unless, it falls out from the uptrend channel.

Armed with an arsenal of investment knowledge, Xavier is the Senior Research Editor at Shares Investment.

Please click here for more information about this author.

Midas Hldgs  -- -- --   
Business: Manufacturer of aluminium alloy extrusion products for China's rail transportation sector. [FY16 Turnover] Aluminium alloy (99.3%), polyethylene pipe (0.7%).

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