Chart 1: FBM KLCI (23/12/2009～21/04/2010)
As shown on Chart 1, the KLCI retreated after resisted by the 1347.61 level and started to consolidate, but it managed to stay above the 14, 21, 31 EMA, suggesting that the overall uptrend is still intact. However, as indicated by A, total market volume started to decline, suggesting that the market participation has reduced, as investors are staying on the sidelines while market direction is unclear. Technically, if volume should stay below the 40-day VMA level, it suggests that the market participation is insufficient, thus the market is less likely to pick up strength, or the consolidation is still intact.
Meanwhile, as shown on chart 2, the FBMACE is testing the 4130 support level, and if it should break below this level, more downside movement is expected. Generally, during a healthy bullish market, major indices should be rising together. But currently, the KLCI is moving in uptrend, but the FBMACE is moving in downtrend. Therefore, this suggests that the bullish market is very selective, thus not the most ideal condition. In other words, investors should pick stock with even more consideration.
Chart 2: FBMACE (23/12/2009～21/04/2010)
CIMB-1023]: Breaking below Ascending Wedge.
Chart 3: CIMB-1023 (23/12/2009～21/04/2010)
As shown on chart 3, price of CIMB formed an Ascending Wedge pattern, with the L1 line being the dynamic support and the L2 line being the dynamic resistance. An Ascending Wedge itself is an uptrend pattern, but with the upside volatility gradually reducing, implying that the uptrend is getting old.
As indicated by A, price of CIMB broke below the L1 line, suggesting that the L1 trend is over, but still supported by the 14, 21, 31 EMA. This shows that despite the L1 uptrend is no longer holding up, price of CIMB has not formed a downtrend yet.
Technically, if price should rebound as a pullback effect, and touch the L1 line, and later starts falling again, the L1 line would be the resistance line. And if price should break below the 14, 21, 31 EMA, there is a risk of a downtrend formation, thus a signal to cut loss.
| 4 Q Rolling PER | 17.91 times | Dividend Yield | 1.30% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 18.50 sen | 1.46% | 26.31% |
| 31/12/2009 | 25.00 sen | 4.27% | 25.22% |
| 31/12/2009 | 25.00 sen | 2.27% | 31.00% |
| 31/12/2009 | 15.00 sen | 1.94% | 23.53% |
| 31/12/2009 | 15.00 sen | 2.63% | 17.51% |
Table 1: CIMB-1023 yearly dividend, dividend yield, and net profit ratio.
KNM-714: Breaking new low.
Chart 4: KNM-714 (23/12/2009～21/04/2010)
As indicated by A, price of KNM broke below the RM0.70 support with a break-away gap. Technically, this is an important signal, because for those who had bought above the RM0.70 level, and all of them are now losing money. Therefore, the RM0.70 level will be a strong resistance level, for it would be a level for these losers to break even.
After breaking below RM0.70, price of KNM stopped falling when touching RM0.60 level, thus the RM0.60 level is the temporary support for KNM. Meanwhile, the RM0.60 is also the 61.8% of the Fibonacci Retracement line, calculated based on the lowest RM 0.32 to the highest RM1.09 level.
Based on the theory of Fibonacci, 61.8% retracement line is likely to be a reliable support level. However, as for breaking away from the downtrend, price would still need to break above the 14, 21, 31 EMA dynamic resistance, and if price should remain below the 14, 21, 31 EMA, the immediate technical outlook is still bearish biased. If price should break below RM0.60 level, it would be another signal to cut loss for the next support is seen at RM 0.50.
| 4 Q Rolling PER | 14.32 times | Dividend Yield | 0% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 0 sen | 0% | 9.37% |
| 31/12/2008 | 1.5 sen | 3.7% | 13.30% |
| 31/12/2007 | 4.0 sen | 0% | 9.37% |
| 31/12/2006 | 5.0 sen | 0.57% | 14.56% |
| 31/12/2005 | 5.0 sen | 1.40% | 11.97% |
Table 2: KNM-7164, yearly dividend, dividend yield, and net profit ratio.
Revision of previous Case Studies:OSK-5053: Uptrend is still intact.
Chart 5: OSK-5053 (23/12/2009～21/04/2010)
As shown on chart 5, price of OSK tested the RM1.47 resistance, and the immediate resistance is at RM1.47 level. Despite the resistance at RM1.47, the 14, 21, 31 EMA is still the dynamic support for OSK, suggesting that OSK is still trending up.
Technically, if price should break above the RM1.47, more upside room is expected, thus the uptrend shall continue. Other wise, if price should break below the 14, 21, 31 EMA, it would mark an end to the uptrend.
As for those who are already in position, it is a good idea to hold as long as the 14, 21, 31 EMA is still supporting the uptrend, it would be a much better signal if price could break above RM1.47. If price should break below 14, 21, 31 EMA, it would be a signal to take profit.
As for investors who are looking for buying signal, they have to wait until the bullish break out with strong volume, and then apply the 14, 21, 31 EMA as a trailing stop.
| 4 Q Rolling PER | 8.31 times | Dividend Yield | 5.21% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 7.5 sen | 6.1% | 13.73% |
| 31/12/2008 | 7.5 sen | 7.58% | 16.59% |
| 31/12/2007 | 20 sen | 8.62% | 21.38% |
| 31/12/2006 | 12.5 sen | 6.38% | 23.84% |
| 31/12/2005 | 7.5 sen | 7.85% | 13.52% |
Table 3: OSK-5053, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
As the market is consolidating, many counters are having similar corrections. Therefore, selecting counters during a consolidation stage has to be very careful, and must select counters consolidating in an existing uptrend, and avoid downtrend stocks.
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