Chart 1: KLCI chart from 27/10/2009 to 24/02/2010.
Based on the statistic in the past, if the KLCI should rally without volume reaching above the 40-day VMA level, it suggests that the rally is only selectively, and not a strong bullish market. Therefore, there are some counters gaining, while many counters are actually still trending down. Investors should carefully select the stocks that follow the broad market and avoid the stocks which are trending down.
Stocks that follow the market flow:
AXIATA
Chart 2: Axiata, from 27/10/2009 to 24/02/2010.
As indicated by A, price of Axiata followed the KLCI rebound, while continuously being supported by the 14, 21, 31 EMA, and tested the RM 3.50 resistance level. If price of Axiata should break above this resistance, it would be making a new high, thus suggesting a continuation of the uptrend. However, a valid break out has to be confirmed with strong volume, and provided that price of Axiata is still staying above the rising 14, 21, 31 EMA, it is a good idea to keep the stocks as the uptrend remains intact. If price should break below the 14, 21, 31 EMA, it would be a signal to take profit or to cut loss. If price should break above the RM 3.50 level, the next resistance for Axiata is seen at RM 4.10.
| Leading PER | 17.05 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2008 | 0 sen | 0% | 4.39% |
Table 1: Axiata, yearly dividend, dividend yield, and net profit ratio.
CIMB
Chart 3: CIMB, from 27/10/2009 to 24/02/2010.
As indicated by A, the CIMB gapped up and breaking above the 14, 21, 31 EMA dynamic resistance, with strong volume, therefore, it is likely that CIMB could resume its uptrend movement. Technically, a strong volume is needed to confirm a valid break out, as the increased of volume suggests more inflow of fresh capital, new buying interest to off-set the selling pressure. If volume is low during a break out, the break out would not be confirmed.
If price of CIMB should remain supported by the 14, 21, 31 EMA, the uptrend is still intact, and it is a good idea to hold the stock, until the price should break below 14, 21, 31 EMA, it would be a signal to take profit. Next resistance for CIMB isat RM 13.58.
| 4 Q Rolling PER | 15.92 times | Dividend Yield | 1.46% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 18.5 sen | 1.46% | 26.31% |
| 31/12/2008 | 25 sen | 4.27% | 25.22% |
| 31/12/2007 | 25 sen | 2.27% | 31.00% |
| 31/12/2006 | 15 sen | 1.94% | 23.53% |
| 31/12/2005 | 15 sen | 2.63% | 17.51% |
Table 2: CIMB, yearly dividend, dividend yield, and net profit ratio.
Stocks going against the broad market:
LCL
Chart 4: LCL, from 27/10/2009 to 24/02/2010.
As shown on Chart 4, the Bollinger Bands of LCL contracted, suggesting that LCL is consolidating while preparing for a new movement. As indicated by A, the Bollinger Bands re-expanded with the price below the Bollinger Bands, thus giving a bearish signal. If the Bollinger Bands should continue to expand with price staying below the Bollinger Middle Band, more downside movement is expected. Support for LCL is at RM0.12 while the Bollinger Middle Band is serving as the dynamic resistance.
| 4 Q Rolling PER | -0.08 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0% | -126.96% |
| 31/12/2008 | 0 sen | 0% | 2.01% |
| 31/12/2007 | 10 sen | 1.56% | 7.41% |
| 31/12/2006 | 10 sen | 6.06% | 7.62% |
| 31/12/2005 | 0 sen | 0% | 7.00% |
Table 3: LCL yearly dividend, dividend yield, and net profit ratio.
GENTING
Chart 5: Genting, from 27/10/2009 to 24/02/2010.
As shown on chart 5, price of Genting continued its downtrend movement, after breaking below the RM 6.60 support. As indicated by A, the 14, 21, 31 EMA is still falling while serving as the dynamic resistance, and technically, as long as price is still staying below the 14, 21, 31 EMA, the downtrend shall remains intact.
Despite being a component of the KLCI, price of Genting failed to rebound together with the KLCI. This proves that the importance of identifying a stock that moves along with the direction of the broad market, investors can not just pick any KLCI component counters.
| 4 Q Rolling PER | 34.44 time | Dividend Yield | 1.11% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2008 | 7 sen | 1.89% | 6.27% |
| 31/12/2007 | 37sen | 0.98% | 12.15% |
| 31/12/2006 | 32sen | 0.97% | 21.66% |
| 31/12/2005 | 29sen | 1.36% | 22.86% |
| 31/12/2004 | 24sen | 1.26% | 19.97% |
Table 4: Genting, yearly dividend, dividend yield, and net profit ratio.
BURSA
Chart 6: Bursa, from 27/10/2009 to 24/02/2010.
As shown on chart 6, price of Bursa did not rebound, despite the strong rebound of the KLCI, and it is still staying below the falling 14, 21, 31 EMA, thus showing that the downtrend is still intact. Currently, as indicated by A, support for Bursa is at RM 7.17 level, and if price should break below this level, it would be making a new low, and more downside risk is expected as the downtrend remains intact.
| 4季滚动本益比 | 21.66倍 | 周息率 （Dividend Yield） | 2.62% |
| 股息 （Dividend） | 周息率 （Dividend Yield） | 净利润率（Net Profit Ratio） | |
| 2009年12月31日 | 19.10仙 | 2.46% | 44.13% |
| 2008 年12月31日 | 24.30仙 | 4.72% | 31.48% |
| 2007 年12月31日 | 85.00仙 | 5.94% | 48.91% |
| 2006 年12月31日 | 54.50仙 | 6.77% | 41.55% |
| 2005年12月31日 | 20.00仙 | 5.46% | 42.13% |
Table 5: Bursa yearly dividend, dividend yield, and net profit ratio.
Conclusion:
It is important to note that to follow the broad market flow, one should pick stocks that have the similar movement, and simply picking any KLCI component or any blue chips is not the way.
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