Wednesday, August 25, 2010

Bjcorp, Gamuda, Zelan

As the total market volume breaks above the 40-day VMA level, the local market activity is picking up as investors returning to the equity market. Generally, if volume should stay above the 40-day VMA level, it would help lift the market sentiment. However, investors are advised to choose counters that are already in uptrend, or resuming their uptrend, or breaking away from their downtrend

BJCorp – 3395: Still in downtrend.

Chart 1: BJCorp – 3395 (30/03/201021/07/2010)

As indicated by chart 1, ever since breaking below the 14, 21, 31 EMA in April, price of Bjcorp has been staying below the L1 downtrend line as well as the 14, 21, 31 EMA, despite many technical rebound, the downtrend remains.

Please note that the characteristic of a downtrend, which is Lower-highs. It means that every time price rebound, its rebound peak is lower than the previous rebound peak.

Technically, as long as price staying below either the L1 line or the 14, 21, 31 EMA, it is not a good time to buy. Try think this, for those who bought during this downtrend, he or she must have thought that the day they bought was the lowest of the downtrend, or else, knowing that price could go lower, they won't dare to buy at all. However, how many people had guessed wrongly? Only to realize that they were buying too soon.

Nevertheless, support for Bjcorp is at RM1.00 psychological level, and there is a chance for price to rebound or consolidate at this level. However, a valid buy signal is only when price could successfully break away the L1 downtrend line, then a formation of a higher-low with strong volume.

4 Q Rolling PER

53.66 times

Dividend Yield

0.91 %

Dividend

Dividend Yield

Net Profit Ratio

30/4/2010

1 sen

0.79 %

1.23 %

30/4/2009

3.35 sen

3.99 %

-0.83 %

30/4/2008

9.00 sen

8.11 %

17.20 %

30/4/2007

0 sen

0 %

5.75 %

30/4/2006

0 sen

0 %

-24.33 %

Table 1: BJCorp – 3395, yearly dividend, dividend yield and net profit ratio

Gamuda – 5398: Still in uptrend.


Chart 2: Gamuda – 5398 (31/03/201021/07/2010)

As shown on chart 2, price of Gamuda broke above the 14, 21, 31EMA on the 4thof June, and since then, the uptrend is still intact. Despite a correction on the 29thof June, price of Gamuda remains above the 14, 21, 31 EMA, and volume also increased strongly when price rebound from the 14, 21, 31 EMA, suggesting more inflow of fresh buying interests to off set the selling pressure. Therefore, the uptrend resumed.

Technically, the 14, 21, 31 EMA is still the dynamic support for Gamuda, and provided that price of Gamuda is still supported by the 14, 21, 31 EMA, it is a good idea to hold on to the stocks, until price should break below the 14, 21, 31 EMA, then it would be a signal to take profit or to cut loss.

For the mean time, Gamuda is testing the RM3.44 resistance level, which is an important resistance for it is the peak of 2009. If price should break above this level, it would be making a 1 year new high. Next resistance is at RM4.00while the support is at 14, 21, 31 EMA.

4 Q Rolling PER

27.36 times

Dividend Yield

2.38 %

Dividend

Dividend Yield

Net Profit Ratio

31/7/2009

8 sen

2.38 %

7.10 %

31/7/2008

25 sen

9.26 %

13.52 %

31/7/2007

46 sen

5.90 %

12.23 %

31/7/2006

16 sen

4.57 %

13.74 %

31/7/2005

16 sen

3.43 %

17.26 %

Table 2: Gamuda – 5398, yearly dividend, dividend yield and net profit ratio

Review Last week's case study: Zelan – 2283: Break away downtrend.

Chart 3: Zelan – 2283 (27/10/200930/06/2010)

As indicated by A, price of Zelan breaks above the L1 downtrend line, breaking away from the downtrend. Therefore, the 14, 21, 31 EMA is now serving as the dynamic support for Zelan. Technically, provided that price is still above the EMA, the uptrend shall remains intact.

For a healthy uptrend, there must be healthy corrections, but volume during the correction should not be high, this way it suggests that the selling pressure is not huge. Lastly, after the correction, price has to rebound from the 14, 21, 31 EMA with strong volume, then it would form a higher-low, thus a good chance to resume its uptrend.

In other words, if price is still being supported by the 14, 21, 31 EMA, then it is a good idea to keep the stock, until price should break below the 14, 21, 31 EMA, then it would be a signal to cut loss or to take profit. Nevertheless, immediate resistance for Zelan is at RM0.685~ RM 0.69, next resistance is at RM0.81 level. 14, 21, 31 EMA is the current dynamic support.

4 Q Rolling PER

0 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/3/2010

0 sen

0%

-24.77%

31/3/2009

5 sen

8.93%

-7.33%

31/3/2008

14 sen

6.76%

-1.30%

31/3/2007

15 sen

1.88%

12.60%

31/3/2006

10 sen

2.96%

14.47%

Table 3: Zelan – 2283, yearly dividend, dividend yield and net profit ratio

Conclusion:
To buy only when price is rising, is a simple idea, which is to make sure that when buying, the stock is resuming its uptrend after a correction. However, it is hard to do, because the entry price is usually higher, and it makes most investors uncomfortable to buy stocks at a higher price. But remember, it is the price different that we want, and the direction, not the price.


Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。


Scomi, JCY, EO

As shown on chart 1, the KLCI rebounded from the 14, 21, 31 EMA, suggesting that the uptrend is still intact. Meanwhile, total market volume increased, while staying above the 40-day VMA level. This suggests the market participation is getting better, and generally it would also lift the market sentiment.

Chart 1: KLCI


Revision of last week's Case Study: Scomi – 7158 : Breaking above RM0.42 resistance.

Chart 2: Scomi – 7158 (31/03/2010 ~ 21/07/2010)

As indicated by A, price of Scomi breaks above RM0.42 resistance, but failed to closed firmly higher. Therefore, the break out is yet to be confirmed. Nevertheless, the upside biased movement is still intact, since price of Scomi is already above the 14, 21, 31 EMA.

Technically, now that price of Scomi is taking amild consolidation, with low volume, this suggests that the consolidation is a healthy one as no panic selling is sighted. If price should rebound from the 14, 21, 31 EMA, with strong volume, it would form a higher-low, thus an uptrend is formed, and the next resistance is at RM0.46 level while the 14, 21, 31 EMA is still serving as the dynamic support.

4 Q Rolling PER

33.73 times

Dividend Yield

0.00%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

0 sen

0 %

0.5 %

31/12/2008

0.5 sen

1.49 %

5.53%

31/12/2007

1.25 sen

1.10 %

3.58 %

31/12/2006

1.50 sen

1.49%

5.37 %

31/12/2005

1.20 sen

1.20 %

16.19 %

Table 1:Scomi – 7158, yearly dividend, dividend yield, and net profit ratio.

JCY – 5161: Consolidating.

Chart 3:JCY – 5161 (31/03/2009 ~ 21/07/2010)

After falling from its peak of RM 1.98, price of JCY has been falling for about 3 months and now consolidating in sideways movement. As indicated by A, the Bollinger Bands contracts, as the volatility of price reduces, this suggests that JCY is also preparing for a new movement.

Technically, the consolidation is expected to carry on until the Bollinger Bands re-expands. If the Bollinger Bands should re-expand, with price of JCY above the Bollinger Middle Band, it would be a bullish biased signal. However, if the Bollinger Bands should re-expands with price of JCY below the Bollinger Middle Band, it would be a weak signal and more downside movement is expected. Meanwhile, if JCY should fall below RM1.44, it would be making a new low, and it is a signal to cut loss.

Continue on previous Case Study: E&O – 3417]: Break away from downtrend.

Chart 4: E&O – 3417 (24/12/2009 ~ 21/07/2010)

As indicated by A, price of E&O broke above the L1 downtrend line, breaking away from the downtrend. It touched its peak of RM1.04 before retreated as profit taking took place.

Technically, it is normal to have a retreat of price but provided that it is still supported by the 14, 21, 31 EMA, the uptrend shall remains intact. When price should rebound and form a higher-low, with strong volume, it would means a resumes of an uptrend, and the 14, 21, 31 EMA shall continue serving as the dynamic support as well as a trailing stop reference.

In other words, for those who had bought at the break out of L1 line, it is a good idea to hold the stock, all the way until price should break below the 14, 21, 31 EMA. As for new interested buyers, the ideal entry point would be a higher-low formation, with strong volume. Nevertheless, next resistance is at RM1.02~RM1.03 followed by RM1.07~RM1.10 level.

4 Q Rolling PER

14.94 times

Dividend Yield

3.82%

Dividend

Dividend Yield

Net Profit Ratio

31/03/2010

3.8 sen

4.29%

20.12%

31/03/2009

0 sen

0%

-12.45%

31/03/2008

5 sen

2.78%

24.95%

31/03/2007

4 sen

1.84%

5.76%

31/03/2006

0 sen

0%

12.93%

Table 3: E&O – 3417,yearly dividend, dividend yield, and net profit ratio.

Conclusion:

From the above case studies, it proves that it is a better idea to buy stocks which are trending up or started to trend up after breaking away from its downtrend. If one should buy too early, during a sideways market or a correction, he or she could have bought at the end of a uptrend or a beginning of a downtrend. Buy when the price is up, and apply trailing stop using 14, 21, 31 EMA, it would help investors reduce trading risk.






Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

OSK, Pbbank, Kinstel

The Dow Jones Industrial Average fell below 10000 mark again, and now testing the 9750~9900 support level. If the Dow Jones Industrial Average should break below this level, it would be forming a Head and Shoulders Top, which is a bearish reversal pattern. If the Dow Jones Industrial Average should fall, it would definitely affect markets across the globe, and the local individual stocks are unlikely to be exempted.

Revision of last week's Case Study: OSK – 5053: Has not formed an uptrend.

Chart 1: OSK – 5053 (10/03/201030/06/2010)

As indicated by A, price of OSK fell below the 14, 21, 31 EMA, and therefore, it has failed to form an uptrend. Now that price is below the 14, 21, 31 EMA, the immediate technical outlook is weak, and the 14, 21, 31 EMA is serving as the dynamic resistance instead.

Technically, if price should remains resisted by the 14, 21, 31 EMA, the weakening movement of OSK is expected to carry on. In other words, breaking out above the 14, 21, 31 EMA is important if OSK should regain its position. If price should break above the 14, 21, 31 EMA with strong volume, there is a chance for OSK to regain its strength. Support for OSK is at RM1.22 level while the resistance is at RM1.35 level.

4 Q Rolling PER

6.15 times

Dividend Yield

5.91%

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 1: OSK – 5053, yearly dividend, dividend yield, and net profit ratio.

PBBANK – 1295: Resisted by RM12.00.


Chart 2: PBBANK – 1295 (26/12/200823/06/2010) (Weekly Chart)

Chart 2 is a weekly chart of Public Bank. As shown on chart 2, since April 2009, price PBBank has broken above the 14, 21, 31 week EMA, and it remained above the 14, 21, 31 week EMA since than. Therefore, the 14, 21, 31 EMA is an important long term uptrend dynamic support.

Although the long term movement of the Pbbank is still on the uptrend, price of Pbbank has been testing the resistance of RM12.00 for many times, and remains resisted. Therefore, this is also an important resistance for Pbbank, as many investors have built a memory at this level, and eventually, the selling pressure is expected to be stronger at this level. In other words, to break above this resistance, strong volume, a strong inflow of new buying interests are needed.

Due to the frequent dividend payout, and the dividend yield is generally attractive, Pbbank is generally a favorite for long term investors. Therefore, it is a good idea to apply the weekly chart on Pbbank when doing analysis. Ideally, the best buying signal would be a higher-low of the Weekly chart.

If price should stay above the weekly 14, 21, 31 EMA, it is a good idea to hold this counter. But if price should break below the weekly 14, 21, 31 EMA, investors might want to consider taking profit or partially taking profit.

4 Q Rolling PER

15.75 times

Dividend Yield

4.62 %

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

55 sen

4.55 %

25.91 %

31/12/2008

55 sen

6.21 %

24.58 %

31/12/2007

75 sen

6.82 %

22.22 %

31/12/2006

60 sen

7.74 %

22.89 %

31/12/2005

55 sen

8.40 %

24.50 %

Table 2: PBBANK – 1295, yearly dividend, dividend yield, and net profit ratio.

KINSTEL – 5060: Remains in weak trend.

Chart 3: KINSTEL – 5060 (10/03/201030/06/2010)

As shown on chart 3, price of Kinstel rebounded at the end of May at Rm0.77 level, and price gradually regained its position. However, despite the rebound, it is still resisted by the 14, 21, 31 EMA, thus suggesting that the downtrend remains intact.

Now that price has started to fall again after being resisted by the T1 line, it suggests that the downtrend would resume, thus the technical outlook is expected to be on the weaker side. If price should break below RM0.77 level, it would mark a new low, then, it is assumed that all investors who bought this share and are still holding will be losing money, thus creating a stronger selling pressure in the downtrend.

In short, it is unwise to buck the downtrend, and try to catch a lower price. Generally, a safer strategy is to wait until price break above the 14, 21, 31 EMA with strong volume, then look for a higher-low formation with strong volume, that would be an ideal buy signal. Nevertheless, if price should break below RM0.77, the next support level is at RM0.67 level.

4 Q Rolling PER

10.11 times

Dividend Yield

1.23%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

1 sen

1.01 %

0.95%

31/12/2008

1.7 sen

4.00%

1.52%

31/12/2007

1.7 sen

1.27%

6.38%

31/12/2006

7.5 sen

4.60%

35.60%

31/12/2005

5 sen

5.49%

3.57%

Table 3: KINSTEL – 5060, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
The performance of the Dow Jones Industrial Average has always been a major catalyst for many stock markets across the globe. Therefore, it is crucial for investors to not over-look the performance of the Dow Jones Industrial Average.







Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Unisem, Axiata, IRCB

Total market volume continues to stay below the 40-day VMA level, suggesting that the market is indeed very quiet, as inflow of fresh capital is slow. With the KLCI now below the Bollinger Middle Band, the immediate technical outlook for the KLCI is on the negative side, and therefore, most counters are likely to trend down. Nevertheless, we shall continue staying some Case Studies

UNISEM – 5005: Forms a Symmetrical Triangle.

Chart 1: UNISEM – 5005 (18/01/2010 ~ 30/06/2010 )

As shown on chart 1, price of Unisem rebounded on the L1 line on the 26th of May, and later breaking above the 14, 21, 31 EMA, and resumed its uptrend movement. However, price failed to test its recent high, and instead, forming a lower high at RM3.25 level, L2 line. Therefore, it has formed a Symmetrical Triangle. This suggests a consolidation for Unisem.

The characteristic of a Symmetrical Triangle is that the fluctuation of price is getting lower as the price moves towards the right side of the Triangle, and the direction shall remains unclear, until a valid break out, above or below the Symmetrical Triangle. If price should break above the L2 line, with strong volume, then the 14, 21, 31 EMA would resumes its role as a dynamic support for the rally of Unisem.

Other wise, if price should break below the L1 line, it would means an end of the uptrend, but this signal does not need a strong volume to confirm. Then, the 14, 21, 31 EMA would be serving as the dynamic resistance for the falling price.

4 Q Rolling PER

11.23 times

Dividend Yield

0.88%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

2.5 sen

1.14 %

5.97 %

31/12/2008

2.5 sen

3.57 %

1.61%

31/12/2007

10 sen

6.06 %

12.25 %

31/12/2006

10 sen

6.06 %

10.38 %

31/12/2005

8 sen

5.76 %

3.92 %

Table 1: UNISEM – 5005, yearly dividend, dividend yield, and net profit ratio.

AXIATA – 6888: Capped by RM3.95~RM 4.00 Resistance.

Chart 2: AXIATA – 6888 (10/02/2010 ~ 30/06/2010)

As shown on chart 2, price of Axiata tested the RM3.95~RM4.00 resistance many times, and until now, it is still being resisted by this level. Therefore, it is believed that many investors have formed a memory at this level, thus creating a selling pressure when price approach this level.

Technically, if price would break above this level, more volume is needed, as more volume suggests more inflow of fresh capital to off set the selling pressure. If price should really break above the RM3.95~Rm4.00 resistance, then the 14, 21 ,31 EMA would continue serving as the dynamic support, as well as the trailing stop reference of the rally.

On the contrary, if price should remain resisted by the RM3.95~RM4.00 level again, and later break below the 14, 21, 31 EMA, it would be a signal suggesting that the price movement of Axiata could be turning negative, and support would be at RM3.60 level.

4 Q Rolling PER

13.07 times

Dividend Yield

0.00 %

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

0 sen

0 %

12.61 %

31/12/2008

0 sen

0 %

4.39 %

Table 2: AXIATA – 6888, yearly dividend, dividend yield, and net profit ratio.

IRCB – 2127: Still being supported.

Chart 3: IRCB – 2127 (10/03/2010 ~ 30/06/2010)

As shown on chart 3, price of IRCB is still supported by the T1 uptrend line, in spite of the profit taking activities. With the price o f IRCB still above the 14, 21, 31 EMA, the immediate technical outlook is still on the positive side, and therefore, for those who are holding this stock, it is a good idea to hold on to it as long as the 14, 21, 31 EMA is still supporting the price. If price should break below the 14, 21 ,31 EMA, it would be a signal to cut loss, or to take profit.

As for those who are looking to but this stock, there is no buy signal for the moment. Technically, price have to rebound from the 14, 21, 31 EMA, and form and higher-low, then only it is a buy signal, which suggesting a chance of continuation of the existing uptrend. Immediately after buying, investors should set a trailing stop by using the 14, 21 ,31 EMA as a reference.

4 Q Rolling PER

98.73 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/01/2010

0 sen

0%

3.56%

31/01/2009

0 sen

0%

-3.83%

31/01/2008

0 sen

0%

-16.09%

31/01/2007

0 sen

0%

-5.36%

31/01/2006

0 sen

0%

0.15%

Table 3: IRCB – 2127, yearly dividend, dividend yield, net profit ratio.

Conclusion:
Although the KLCI has not formed a downtrend, total market volume remains low, and this suggests that the investors' confidence is still low, thus the KLCI is likely to stay weak. If volume should remains low, there won't be sufficient inflow of fresh capital to off set the selling pressure. Therefore, it is generally harder for any stock to sustain its uptrend. It is important to honor your trading and cut loss plan.





Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Monday, August 23, 2010

OSK, Muhibah, KNM

Last week, the KLCI broke above the 14, 21, 31 EMA, breaking away from the downtrend formation. However, total market volume remains low, as this implies that the investors' confidence is still low. Meanwhile, the world cup is still going on, thus the stock market activities is expected to slow.

OSK – 5053: Breaking away from downtrend.

Chart 1: OSK – 5053 (03/03/201023/06/2010)

As indicated by A, after breaking above the T1 downtrend line, price of OSK also broke above the 14, 21, 31 EMA, with the immediate technical outlook turning to positive. If price of OSK should form a higher-low above the rising 14, 21, 31 EMA, it would be a characteristic of an uptrend, and the best confirmation to that is a strong volume. Then, the 14, 21, 31 EMA would be serving as a dynamic support for the uptrend.

As for investors who has not bought this counter, the current conditions are not the most ideal buy signal. However, as for those who are holding OSK, it is a good idea to hold on to this stock for as long as it could stay above the 14, 21,31 EMA. Nevertheless, support is at RM1.22 while the resistance is at RM1.40.

4 Q Rolling PER

6.39 times

Dividend Yield

5.68%

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 1:OSK – 5053, yearly dividend, dividend yield, and net profit ratio.

Muhibah – 5703: Signs of an uptrend formation.

Chart 2: Muhibah – 5703 (10/2/201023/06/2010)

As indicated by A, price of Muhibah broke above the 14, 21 ,31 EMA, possibly forming an uptrend. However, it is testing the RM0.95 Fibonacci resistance (38.2% Retracement line). If price should retreat, it is very normal, but it has to rebound from the 14, 21, 31 EMA in order to form a higher low, which is an important characteristic of an ideal uptrend. If price should form a higher-low, with strong volume, it would be a buy signal.

The above mentioned technical conditions are still not available. Based on the current market sentiment, if there were no positive news to trigger some buying interest, volume is expected to stay low. In short, it is harder to wash out the selling pressure if volume should stay low. Resistance for Muhibah is at RM0.985, RM1.02 and RM1.07 Fibonacci, while the support is at RM 0.90.

4 Q Rolling PER

86.36 times

Dividend Yield

2.63 %

Dividend

Dividend Yield

Net Profit Ratio

31/03/2010

2.5 sen

2.72 %

0.64 %

31/03/2009

2.5 sen

2.53 %

1.02 %

31/03/2008

4.5 sen

1.20 %

4.94 %

31/03/2007

7.5 sen

2.88 %

3.06 %

31/03/2006

4 sen

5.76 %

2.68 %

Table 2: Muhibah – 5703, Yearly dividend, dividend yield, and net profit ratio.

KNM – 7164: Could be forming a Rounding Bottom.

Chart 3: KNM – 7164 (03/03/201023/06/2010)

As indicated by A, the Bollinger Bands of KNM re-expanded, with price of KNM above the Bollinger Middle Band, thus showing an improvement of the immediate technical outlook. However, volume remains low to confirm such positive signal.

Currently, KNM is likely to form a Rounding Bottom pattern. Generally, after falling in a downtrend, when stock price consolidated sideways for a longer period of time, it could form a Rounding Bottom. The characteristic of a Rounding bottom is that price gradually regain its position, and volume gradually increases. However, it is very difficult to catch the timing of a Rounding Bottom, for some formation of Rounding Bottom could take up to 6 months. Therefore, investors who buy a Rounding Bottom stock is expected to hold the stock for a considerably longer time frame.

Since the period of holding is longer before the actual uptrend is formed, the open position is exposed to any changes of external factors, thus a higher risk of uncertainty, and less control for investors. Therefore, before one should take up a Rounding Bottom position, one should consider the above carefully. Nevertheless, support for KNM is at RM0.47RM0.48 level.

4 Q Rolling PER

18.18 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/1/2010

0 sen

0%

9.37%

31/1/2009

1.5 sen

3.7%

13.30%

31/1/2008

4 sen

0.52%

16.29%

31/1/2007

5 sen

0.57%

14.56%

31/1/200

5 sen

1.40%

11.97%

Table 3: KNM – 7164, Yearly dividend, dividend yield, and net profit ratio.

Conclusion:
As the KLCI is showing some sign of regaining its strength, many counters were breaking away from their downtrend. However, the lack of volume is still a major set back. Therefore, the sustainability of this improvement is doubtful. In other words, investors are reminded to follow their trading plan strictly, and cut loss, if the stock turns the other way round.





Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

IRCB, CSCSTEL, 3A

Ever since rebounding from the 1243 level, the KLCI has gained, so far, over 80 points or 6.8%, it also broke above the 14, 21, 31 EMA. Technically, the KLCI has broken away from its downtrend, and might have a chance to resume its bullish trend. However, total market volume remains weak, suggesting that the investors confidence is not yet totally recovered. Thus this is still not the most ideal time to invest.

IRCB – 2127: Possibly uptrend.

Chart 1: IRCB – 2127 (11/01/2010 ~ 23/06/2010 )

As shown on chart 1, IRCB rebounded at RM0.645 level, and broke above the downtrend line. It also broke above the 14, 21, 31 EMA, and later forming a higher-low, as indicated by A, this is a sign of an uptrend formation. If volume should remain strong, the uptrend is expected to carry on.

Technically, provided that the price is above 14, 21, 31 EMA, the uptrend would sustain, until the price should break below 14, 21, 31 EMA, then it would be a signal to take profit or to cut loss. Despite technical signal suggesting and uptrend, based on the behavior of this counter, it is highly speculative by nature. Therefore, investors are advised to follow strictly their trading plan. Current support is at RM0.73 while the resistance is at RM0.90.

4 Q Rolling PER

37.1 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/01/2010

0sen

0%

3.56%

31/01/2009

0sen

0%

-3.83%

31/01/2008

0sen

0%

-16.09%

31/01/2007

0sen

0%

-5.36%

31/01/2006

0sen

0%

0.15%

Table 1: IRCB – 2127, yearly dividend, dividend yield, and net profit ratio.

CSCSTEL – 5094: Could resume its uptrend.

Chart 2: CSCSTEL – 5094 (10/02/2010 ~ 23/06/2010)

As shown on chart 2, price of CSCSTEL retreated for the last two months as lead by the weakening broad market. However, as indicated by A, price of CSCSTEL rebounded quickly, and returned to above the 14, 21, 31 EMA, as soon as the broad market rebounded.

Technically, with price of CSCSTEL above the 14, 21, 31 EMA, the immediate technical outlook is on the positive side. If volume should pickup, it would test the RM2.00 level. For investors who are holding this stock, it is a good idea to hold on to the positions provided that price is still supported by the 14, 21, 31 EMA dynamic support, until price should break below the 14, 21, 31 EMA, it would be a signal to take profit or to cut loss.

4 Q Rolling PER

6.11 times

Dividend Yiel

d

10.53%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

20 sen

13.07 %

10.48 %

31/12/2008

8.5 sen

10.12 %

4.28 %

31/12/2007

12 sen

8.11 %

6.12 %

31/12/2006

10 sen

9.35 %

6.97 %

31/12/2005

0 sen

0 %

6.42 %

Table 2: CSCSTEL – 5094, yearly dividend, dividend yield, and net profit ratio.

3A – 0012: Break out of downtrend.

Chart 3: 3A – 0012 (03/02/2010 ~ 23/06/2010)

As shown on chart 3, price of 3A break above the T1 downtrend after rebounded from the RM1.56 level. Not only that, price of 3A also broke above the 14, 21, 31 EMA and now forming an uptrend, with the 14, 21, 31 EMA serving as the dynamic support.

As indicated by A, price of 3A retreated slightly as a technical correction. If price should rebound from the 14, 21, 31 EMA or the T2 line, it would form a higher-low, thus a characteristic of an uptrend. If volume should increased significantly as it forms a higher-low, it would be a buy signal, and the uptrend is expected to carry on. On the other hand, if price should break below the T2 line or the 14, 21, 31 EMA, the uptrend would fail, thus a signal to take profit or the cut loss. Support for 3A is at RM1.75 while the resistance is at RM1.87 and RM 1.96.

4 Q Rolling PER

27.34 times

Dividend Yield

0 %

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

0 sen

0%

10.10%

31/12/2008

0 sen

0%

7.97%

31/12/2007

1.2 sen

1.85 %

11.36%

31/12/2006

1.2 sen

4.53 %

5.39%

31/12/2005

0 sen

0%

5.48%

Table 3: 3A – 0012, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
In short, other than price being able to stand above the dynamic support, the increase of volume in an uptrend is also important, for the increase of volume suggests the increase of fresh capital inflow to wash out selling pressure, thus the uptrend could sustain. Of course, a smart investor should be well equipped with the skills of analysis as well as the wisdom to follow the direction of the broad market.





Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Scomi, Zelan, TA.

After returning to above the 200-day Moving Average, the KLCI has broken away from its downtrend formation. However, total market volume remains low (below the 40-day VMA level). This shows that the market confidence is relatively low. We shall continue to study some stocks, and look for their technical condition.

Revision of Last week's case study: Scomi – 7158: Testing the T1 downtrend line.

Chart 1: Scomi - 7158]23/02/201016/06/2010

As indicated by A, Scomi is still testing the T1 downtrend, and it is likely that it would break away from the T1 downtrend line. However, it has not broken above the 14, 21, 31 EMA (Exponential Moving Average) thus the technical outlook shall remains weak.

Technically, if Scomi should consolidate sideways, which is an improvement if compared to the T1 downtrend condition. Therefore, it is easier to rally after a sideways consolidation, this is because when stock is trading at a sideways movement, there were not many losers, thus the fear is not strong. But still, strong volume is needed to push price higher.

Nevertheless, since it has not shown any bullish signal, traders and investors should wait patiently for the signal and avoid buying too early. Technically, if price should break above the 14, 21, 31 EMA with strong volume, it would be a positive signal to buy, and the 14, 21, 31 EMA would be serving as a dynamic support as well as a trailing stop reference. Immediate support for Scomi is at RM0.375 while the resistance is at RM0.45RM0.46.

4 Q Rolling PER

31.35 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

0 sen

0%

0.5%

31/12/2008

0.50 sen

1.49%

5.53%

31/12/2007

1.25sen

1.10%

3.58%

31/12/2006

1.50sen

1.49%

5.37%

31/12/2005

1.20sen

1.20%

16.19%

Table 1: Scomi – 7158, yearly dividend, dividend yield, and net p

rofit ratio.

Zelan – 2283: Still in long term downtrend.

Chart 2:Zelan – 2283 (08/6/200916/06/2010)

As shown on chart 2, price of Zelan rebounded from RM0.445, but still remains below the T1 downtrend line. Therefore, technically, the downtrend remains intact. Technically, price has to break above the 14, 21, 31 EMA with strong volume in order to show some strength, then price has to break above the T1 line to break away from the downtrend. Therefore, any rebound below the T1 downtrend is only a technical rebound, and not yet a reversal.

However, since price is now further below the T1 downtrend line, some traders might want to take advantage of the technical rebound as a short term trading. However, it is important to watch out for the T1 line, and if price should retreat at the T1 line, it is a signal to take profit. Short term trading is generally a high risk trading method, and not suitable for inexperienced traders nor conservative investors. Nevertheless, support for Zelan is at RM0.445 while the resistance is at RM0.60 WinChart Automatic Fibonacci Retracement.

4 Q Rolling PER

0 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/03/2010

0 sen

0 %

-24.77 %

31/03/2009

5 sen

8.93 %

-7.33 %

31/03/2008

14 sen

6.76 %

-1.30 %

31/03/2007

15 sen

1.88 %

12.60 %

31/03/2006

10 sen

2.96 %

14.47 %

Table 2:Zelan - 2283, yearly dividend, dividend yield, and net profit ratio.

TA – 4898 : Breaking away from the Downtrend, still waiting for uptrend condition.

Chart 3: TA – 4898 (23/11/200916/06/2010)

As indicated by A, price of TA rebounded at RM0.62 level, breaking above the 14, 21, 31 EMA as well as the T1 downtrend line.

Although TA has broken above the T1 line, it has not shown a reversal yet. Technically, after breaking above the T1 line, if price should retreat, the volume has to be low, this suggests that the selling pressure is not huge. Then, price would have to form a higher low with strong volume, suggesting some inflow of fresh buying interests, and the 14, 21, 31 EMA would be serving as a trailing stop reference.

The above mentioned conditions are the most ideal technical condition of a reversal, and if the broad market sentiment should improve, the reversal would be more assure. Again, it is important to wait for all the conditions before taking up any position. Immediate support for TA is at RM0.62 and the next resistance is at RM 0.705RM0.71.

4 Q Rolling PER

12.43 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/1/2010

0 sen

0%

20.89%

31/1/2009

4.5 sen

7.32

16.94%

31/1/2008

10 sen

7.94%

41.33%

31/1/2007

7 sen

7.95%

36.94%

31/1/200

3 sen

6.34%

25.54%

Table 3: TA – 4898, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Volume is an important factor of a rally. When volume increases, it suggests that the inflow of fresh capital is increasing. If price should rally with strong volume, it means that new buyers are taking the seller's price, and sellers are selling with premium. Therefore, if this condition remains, an uptrend will form.





Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Don't catch a falling knife.

It is rather normal and logic for one to think that price should rise after every fall, and price should fall after every rise. However, in reality, this may not be totally true. It is because, price may not be able to return to their previous peak after a massive fall, nor price may not fall back to their previous low after a strong rally. Furthermore, a harder question would be, until what level would price starts falling? Or vise-versa. This is why, professional investors don't subscribe to the above simple-minded theory. It takes more than a common sense to be a successful investor.

Generally, it is very difficult for an untrained person to buy a stock when the stock price is rising, because of fear, the fear of a reversal after a rally. Therefore, most investors could only watch the stock climbs while could not take any action, feeling regret. However, when the same stock price starts falling, these investors would start buying, for the same stock is now at a discounted price, only to realize that after they have bought these stocks, the price of these stocks could go even lower. This is a normal cycle for a loser, which is envy and fear when price is rising, because they could not buy it; and regret and fear during the downtrend, because they had bought it too early.

Under normal circumstances, there are patterns and characteristics of an uptrend, which are Higher low and New high, and Lower high and new low for a downtrend. However, not many stock price have the above patterns. As for those stocks which have patterns, a trained investors would take advantage of these characteristics.

It is our human nature to prefer to buy things cheap. Despite knowing that the stock is riding on an uptrend, most untrained investors would still prefer to buy them at a lower price, which is unlikely, for during an uptrend, price usually ended higher.

Therefore, one should map out the probability of stock trends and trade the trend with more science and less emotion. For example, try view an uptrend this way. During an uptrend, the number of days in which stock price closing higher than yesterdays are more than the numbers of days of falling. Therefore, one has a bigger chance in paying a higher price if he or she would like to buy in an uptrend. As long as he or she has planned their trading plan and trailing stop, the risk is still manageable. (Study Chart 1)

On the other hand, during a downtrend, the number of days in which price closing lower than yesterdays' price is greater than the numbers of gaining days. Therefore, it is much easier to enter into a downtrend with a lower price. And therefore, one should never feel good of being able to buy a stock at a lower price, it only means that you could have a higher chance in entering a downtrend, it does not mean that you are smarter. The worst thing could happen to an investor, is that after he or she has bought into a downtrend, and only realized that price could go even lower, and until a point, that they had to convinced themselves to be a 'long term investor'. But deep down, the only reason why they want to go for long term, is because they had lost money. (Study Chart 2).

Chart 1: Uptrend chart pattern.

Chart 2: Downtrend chart pattern.

[Axiata – 6888]: Testing Resistance.

Chart 3: Axiata – 6888 (23/02/2010 ~ 16/06/2010 )

As shown on chart 3, price of Axiata reboundedstrongly, breaking above the 14, 21, 31 Exponential Moving Average – EMA, thus the immediate technical outlook is on the positive side. As indicated by A, price of Axiata is set to test the RM3.95 ~ RM3.96 resistance.

The RM3.95 level is likely to be an important resistance for price of Axiata had tested this level a few times, and when ever price started falling at this level, there were investors losing money, thus forming a negative memory at this level, and these investors are likely to be a ready seller when price should return to this level.

Therefore, if price should test or attempt to break above this level, a strong volume is needed. Or else, without sufficient inflow of fresh capital, it is less likely to off set these ready seller's selling pressure. Immediate support for Axiata is at RM 3.77 while the next resistance is at RM4.20 Fibonacci.

4 Q Rolling PER

12.83 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

0 sen

0%

12.61%

31/12/2008

0 sen

0%

4.39%

Table 1: Axiata – 6888, yearly dividend, dividend yield, and net profit ratio.

Chart 4: OSK – 5053 (22/01/2010~15/06/2010)

As indicated by A, price of OSK has broken away from the T1 downtrend. However, it has not broken above the 14, 21, 31 EMA, thus no bullish signal yet.

Meanwhile, as indicated by B, volume for OSK is still low, as it implies low inflow of fresh capital, to offset the existing selling pressure. Technically, when price should break above any resistance, strong volume is needed.

Nevertheless, when price of OSK breaking away from the T1 line, and consolidating, the current situation is improving, even tough it has not formed an uptrend. Support for OSK is at RM 1.20 while the resistance is at RM 1.35 WinChart Automatic Fibonacci Retracement.

4 Q Rolling PER

6.2 times

Dividend Yield

5.86%

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 2: OSK – 5053, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Before buying any stock, one should set up an trading plan, and know what's the original intention to buy. There is only one object for one to buy a stock, which is to expect the rise of the stock price. If this is true, why pick a stock which is still trending down? Therefore, one should not expect to buy stock cheap if he or she is expected the stock price to rise. Think again, for every one who attempt to buy stock cheap in a downtrend, did not each and every one them thought that it was the lowest day of the downtrend, when they decided to buy, but then, only realized that they are still too early. Please note that there is only “ONE LOWEST DAY” during the entire downtrend, and therefore, chances of getting the ONLY DAY is very slim.




Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。

Friday, August 20, 2010

Scomi, Mphb, KNM

Since falling from 1349.92 points, the KLCI has been falling for almost one month. However, many counters has been falling for over two months, losing more than 20% in value, and until now, still staying in downtrend. What are the technical conditions for a reversal? What is the characteristic of a reversal? Let's take a look at some counters and look out for some of these characteristics.

Scomi – 7158: Testing downtrend line.

Chart 1: Scomi – 7158 (05/02/201002/06/2010)

As shown on chart 1, price of Scomi formed a downtrend for two months, while during this downtrend, a few technical rebounds took place, but failed to break above the T1 downtrend line.

As indicated by A, now that price of Scomi is testing the T1 line again, it is a crucial timing. If price should break above the T1 line and then breaking above the 14, 21, 31 EMA, it would break away from this downtrend. But strong volume is needed to confirm such break out.

On the other hand, if volume should remain low, there is a risk of a false break out, as the buying interests is insufficient to off set the selling pressure. Nevertheless, support for Scomi at RM0.36~RM0.38 level.

4 Q Rolling PER

10.62

Dividend Yield

1.72%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

11 sen

2.01%

15.92%

31/12/2008

3.25 sen

4.06%

5.58%

31/12/2007

1.90sen

0.63%

13.85%

31/12/2006

6.50sen

1.56%

10.49%

31/12/2005

6.50sen

1.46%

12.74%

Table 1: Scomi – 7158, yearly dividend, dividend yield, and net profit ratio.

MPHB – 3859: Downtrend, testing the downtrend line.

Chart 2: MPHB – 3859 (09/1/200902/06/2010)

As shown on chart 2, price of MPHB has formed a T1 downtrend for more than 2 months. During this downtrend, a few technical rebound took place, but failed to break above the T1 downtrend line, and formed lower-highs repeatedly, thus re-affirming the downtrend.

Now that price of MPHB is testing the T1 line and the 14, 21, 31 EMA again, it is a crucial point. If price should break above the T1 and the 14, 21, 31 EMA, with strong volume, it would break away from this downtrend, and stand a chance of a reversal. Then, the 14, 21, 31 EMA would be serving as dynamic support instead.

However, if price should break above the T1 and the 14, 21, 31 EMA with low volume, there is a bigger chance that price would prolong its sideways consolidation after breaking above the T1 line and the 14, 21, 31EMA, or a chance of a false breakout. If price should failed to break above the T1 line, and started falling again, it would form yet another lower-high, with weak technical outlook. Support for MPHB are at RM1.88~1.90 and the next support is at RM1.80.

4 Q Rolling PER

5.89 times

Dividend Yield

4.52%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

9 sen

4.66 %

10.15 %

31/12/2008

10 sen

9.26 %

4.31 %

31/12/2007

11 sen

4.74 %

11.71 %

31/12/2006

0 sen

0%

36.54%

31/12/2005

0 sen

0%

-69.12%

Table 2: MPHB – 3859, yearly dividend, dividend yield, and net profit ratio.

Revision of last week's Case Study: KNM – 7164: Consolidating with weak biased.

Chart 3: KNM – 7164 (05/02/201002/06/2010)

As shown on chart 3, price of KNM is moving sideways around the RM0.50 level, in narrow range. As a result, the Bollinger Bands contracts, suggesting not only a consolidation signal, but that KNM is also preparing for a new movement, and the direction of the new movement shall be revealed once the Bollinger Bands re-expands.

Technically, when the Bollinger Bands has contracted for a period of time, its re-expansion signal is usually clearer. If price should stay above the Bollinger Middle Band as the Bollinger Bands re-expand, it would be a positive signal, then if investors choose to buy, they shall apply the Bollinger Middle Band as a trailing stop reference. On the other hand, if price should stay below the Bollinger Middle Band, as the Bollinger Bands expands, it would be a bearish signal. Immediate support for KNM is at RM0.47. If price should break below this support, it would be making a 15 months new low.

4 Q Rolling PER

17.31 times

Dividend Yield

0%

Dividend

Dividend Yield

Net Profit Ratio

31/12/2009

0 sen

0%

9.37%

31/12/2008

1.5 sen

3.70%

13.30%

31/12/2007

4.0 sen

1.27%

9.37%

31/12/2006

5.0 sen

0.57%

14.56%

31/12/2005

5.0 sen

1.40%

11.97%

Table 3: KNM – 7164, yearly dividend, dividend yield, and net profit ratio.

Conclusion:
Generally, the most ideal reversal pattern consists of the following, a valid technical rebound which break above the downtrend line or the dynamic resistance, with strong volume, then a formation of a higher-low, with strong volume. Strong volume is needed for it represents more inflow of fresh capital to off set the selling pressure.





Copyright © 2009 Straits Index (M) Sdn BhdImportant Disclaimer:These content provided by Straits Index (M) Sdn Bhd is solely for education and information purposes only, and do not suggest any investment advices. All information displayed are believed to be accurate and reliable. Interpretation of the data or analysis is at the reader's own risk. Straits Index (M) Sdn Bhd reserves the rights but obligations to update, admen, or even terminate the materials. 重要声明:以上的内容由海峡指数(马)私人有限公司提供,纯粹是教育性质, 并不是任何的投资忠告。所有资料显示认为是准确和可靠的。对数据或分析的解释和用途是在于用户自己的风险。海峡指数(马)有限公司持有保留及义务更新,甚 至终止材料的权利。