Topglov broke its long-term uptrend line

Topglov broke below its long term uptrend line at RM12.00 yesterday. That uptrend line stretches back to January 2009. In addition, we can see two other negative signs: the MACD entering into the negative territory (potentially a prelude to a sustained decline) and the 20-day SMA line cutting below the 50-day SMA line. We can also note that the RSI is beginning to enter into the 'oversold' territory, where a prolonged stay therein is a prelude for sustained decline. After a sharp fall this morning (to an intra-day low of RM11.18), Topglov has enjoyed a sustained rebound to touch RM11.96 as at 3.45pm.

So, we will wait & see whether the developing rebound can take Topglov back above the uptrend line support at RM12.00 & maybe to rectify the negative technical picture as painted by the indicators. Failing which, Topglov could have made a cyclical top & it could commence on its long-term downtrend shortly thereafter. In fact, a short-term downtrend has already started as seen by the presence of a lower 'low' & a lower 'high' (denoted as L1/L2 & H1/H2).


Chart: Topglov's daily chart as at May 6, 2010 (Source: Tradesignum)

If Topglov has made a top, then chances are that the other rubber glove makers could have made theirs or about to make theirs. After all, Topglov is the top dog in this industry.