Chart 1: KLCI as at 11/5/2011.
As indicated by A, the FBM KLCI breaks above the L1 line, breaking away from its bearish biased technical outlook. However, this does not mean an immediate reversal for the KLCI, it only means that the KLCI is not forming a downtrend yet. Nevertheless, breaking above the L1 line is a positive signal for the KLCI for now.
Despite the improving technical outlook of the KLCI, total market volume remains low, as circled at B. Total market volume stays below the 40-day Volume Moving Average, and this suggests that the market participation is still low, and the inflow of fresh capital is still 'insufficient'. This suggests that the investors are still not feeling confident about the local market.
Rhbcap – 1066: Breaking new high.
Chart 2: Rhbcap – 1066 as at 11/05/2011.
As shown on chart 1, after breaking above the RM 8.70 resistance, price of Rbhcap pullback, but fortunately, it managed to stay above the 14, 21, 31 EMA, as well as the RM8.70 level.
As indicated by A, after finding its supported at the 14, 21, 31 EMA, price of Rhbcap rebounded and formed a higher-low, which means that the uptrend is likely to continue. Therefore, for those whom are already in position, it is a good idea to continue to hold as long as lifting the profit taking or cut loss level higher according to the 14, 21, 31 EMA.
| 4 Q Rolling PER | 13.44 times | Dividend Yield | 2.97% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2010 | 26.38 sen | 3.23% | 23.10% |
| 31/12/2009 | 22.45 sen | 4.25% | 22.14% |
| 31/12/2008 | 19.60 sen | 5.03% | 17.48% |
| 31/12/2007 | 13.60 sen | 3.66% | 21.44% |
| 31/12/2006 | 8 sen | 2.34% | 7.96% |
Table 1: Rhbcap – 1066, yearly dividend, dividend yield, and net profit ratio.
Tenaga – 5347: Testing important support.
Chart 3: Tenaga – 5347 as at 11/05/2011.
As shown on chart 3, price of Tenaga has been supported by the RM 6.00 level for more than 3 months, and until now, despite being supported, it has not been able to regain its strength, but instead, forming lower-highs.
The formation of lower-high outlined the weakness of this stock, but fortunately, Tenaga has not broken below RM6.00 support, thus not yet extending its downtrend. However, investors should not view the RM6.00 support as the “lowest” point. In fact, since started falling in September, 2010, price of Tenaga has been staying in a downtrend, but only recently, finding its support at RM6.00, and temporary putting a pause on the downtrend.
Have you ever wonder, what these investors were thinking when they buy at around RM 6.00. We can safely guess that they must believe that it is the lowest price for now, and hoping that price would start to rebound from here, furthermore this is a heavy weighted KLCI component stock, and the risk of losing the entire line is almost impossible.
It is understandable if one would buy this stock with the above mindset. However, we have to think deeper than that. Are this people who are trying to buy at the bottom making money now? Answer is no. Most of them would say “Never mind, I will hold longer and wait for it to reverse.” But we can not ignore a natural psychology, which is when price is moving sideways, while these investors are already in position, waiting anxiously, the confident as well as the hope will gradually reduce, and some even started to feel regret. “If I knew that it was not going to rebound, I would have waited.” Especially when they see that other stocks are moving, but not this one.
What about those who had bought earlier? Don't you think that they were also believing that it was the “bottom” of the stock at the time they bought it? They were also hoping that they were right, but now, I am guessing that these early buyers are mostly feeling sorry for themselves, together with guilt and regret.
If later, price of Tenaga should break below RM 6.00, how would all these “bottom fishers” feel? By then, there will be more selling pressure, as the RM6.00 level becomes their negative memory, the memory of “betrayal” instead of the original “promise”.
Therefore, I cannot emphasis stronger, that regardless of the price position, buying should be based on the direction of price trend, not the price.
| 4 Q Rolling PER | 9.30 times | Dividend Yield | 4.30% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/08/2010 | 26 sen | 2.94% | 10.56% |
| 31/08/2009 | 17.77 sen | 2.22% | 3.19% |
| 31/08/2008 | 20 sen | 2.53% | 10.07% |
| 31/08/2007 | 36.30 sen | 3.65% | 17.41% |
| 31/08/2006 | 12 sen | 1.31% | 10.43% |
Table 2: Tenaga – 5347, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Discussion of stock and identifying the characteristic is usually easier than in practice. But the hardest part is the psychological factors of investors. Because, we were born to be afraid of stock at higher price, and therefore, making it harder for us to buy a stock existing in an uptrend.
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。
