REDTONE (0032) opened gap up and shot up to intraday high of RM0.495 today. For those who been followed us on our Facebook, this stock is mentioned during our Facebook Live session on 20th April and in our Facebook post on 22nd April 2020.
So, what makes this stock so special that it is being mentioned so many times?
Facebook Live on 20th April 2020
During our Facebook Live session, we mentioned that this stock is one of the stocks that a trader should be interested and add into the watch list. It is attractive as the stock has met conditions below:
- Prior rally with increased volume – REDTONE rebounded from RM0.20 to RM0.345 with good volume, which signalled strong buying interests
- Pull back with diminishing volume – After capped at RM0.345, the price made a pullback amid a declining volume. This is a good sign which shows selling interests on this stock is not high.
- Breakout of the high – With the breakout of RM0.345 high, REDTONE is forming into a higher high with a higher low
- MACD crossed above centreline – MACD as a momentum indicator indicates the positive momentum in REDTONE
With the combination of these conditions, we identified this counter to have a higher probability of trading higher.
Build into a high probability trade setup
Trading doesn’t require complicated technical analysis to make profits from the market. Trading can be easy by merely identifying these positive signals that led to a high probability trade setup. However, do not forget the trade can be losing money even we did everything correctly and with a high probability setup. Thus a trader should always prepare his profit target and stop-loss ahead of entering a trade.
For REDTONE, we identified RM0.30 as our stop loss (major support) and RM0.42 as potential profit target (resistance level) during the Facebook Live session. As the price closed at RM0.43 today, the immediate resistance is at RM0.55.
Ahead of the spike this morning, REDTONE is identified in our M+ Wiz yesterday, triggered by the rule: Resistance Breakout with High Volume. It formed a bullish candlestick, Marubozu which signalled the strong buying interests in this stock.
To play back our Facebook Live video, please visit the below link.
To read our Facebook post, please visit the below link.
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