In my last post on Starhub, (refer to Starhub Breakout in the Making?), I mentioned then that the opportunity to buy into the stock may have arrived but a dip to $2.63 may find it back in the downtrend channel. Prices did drop back and no confirmation of a breakout resulted, with prices dipping even lower currently to $2.57.
That said, I also noted that the 100 day moving average has been providing strong support allowing prices to bounce up on the 21st of Dec to attempt breaking out of its downtrending channel. This didn't occur unfortunately. However, if we look at the chart, the opportunity may be close by.
The 100dma has met the upper regions of the downtrend and may provide that extra push to prevent price from falling further. That said, indicators don't show any evidence that prices will head higher any time soon. Volume too, is much lower than the previous selloff on the 17th of Dec that resulted in the ugly black candle hinting at the probable lack of sellers. As such, we may find prices hovering around this region, bouncing from its 100dma support to its resistance at $2.65 before attempting a breakout. In other words, a triangle may result.
As an income stock, with a dividend yield of 7.4% and a p/e of 13.8, Starhub is rather attractive as compared to its peers. However, maintaining its 20 cent/share dividend remains something of a concern to analysts.
Vested,
~K
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