Supermx – 7106: Still in downtrend.
Chart 1: Supermx – 7106 (18/05/2010 ~ 08/09/2010 )
As shown on chart 1, price of Supermx fell below the 14, 21, 31 EMA since 11th of August, and since then, it has been trending down, losing up to RM1.40 or 24%. Despite an attempt of technical rebound, price of Supermx is still resisted by the 14, 21, 31 EMA, which is still serving as the dynamic resistance.
Technically, as long as price of Supermx is still below the 14, 21, 31 EMA, the immediate technical outlook is still bearish biased. Therefore, despite price is getting lower, it is not a good idea to pick up shares that is still falling in a downtrend.
In short, provided that the stock price is still falling below the 14, 21, 31 EMA, there is no ideal buy signal. Technically, an ideal buy signal would be a formation of a higher-low above the 14, 21, 31 EMA. Support for Supermx is at RM4.50~RM4.60, while the resistance is at 14, 21, 31 EMA dynamic resistance.
| 4 Q Rolling PER | 7.24 times | Dividend Yield | 2.37% |
| 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 | 1.90 sen | 0.63 % | 13.85 % |
| 31/12/2006 | 6.50 sen | 1.56 % | 10.49 % |
| 31/12/2005· | 6.50 sen | 1.46 % | 12.74 % |
Table 1: Supermx – 7106, yearly dividend, dividend yield, and net profit ratio.
Revision of last week's case study: JCY - 5161: Still is downtrend.
Chart 2: JCY – 5161 (18/05/2010 ~ 08/09/2010 )
As shown on chart 2, JCY technically rebounded strongly last week, with substantial volume, suggesting some bargain hunting activities. However, as indicated by A, price of JCY is still resisted by the 14, 21, 31 EMA, which is is still serving as the dynamic resistance, and as a result, the downtrend is still intact.
Although many attempted to catch the rebound, and look for short term profit, it is a high risk strategy, because the downtrend is still intact. If price should retreat again, and resumes its downtrend, those who attempt to catch the short term rebound would have been caught by the falling of price.
Technically, there is no ideal buy signal for the moment, and the rebound last week was purely technical rebound, it was not a reversal signal yet, unless price could break above the 14, 21, 31 EMA successfully, and form a Higher-low, which is the first characteristic of an uptrend formation. Nevertheless, immediate support for JCY is at RM0.875 level.
| Leading PER | 8.259 times | Dividend Yield | 0% |
| Dividend | Earning Per Share | ||
| 30/06/2009 | 0 sen | 2.72 sen | |
| 31/03/2009 | 3.91 sen | 3.22 sen | |
Table 2: JCY - 5161, quarterly earning and dividend.
Genting – 3182: Uptrend is still intact.
Chart 3: Genting – 3182 (18/05/2010 ~ 08/09/2010 )
Among those heavy weighted blue chip counters which lifted the KLCI, one of them is Genting. As shown on the chart above, price of Genting touched is resistance at RM9.62 and retreated, entering a consolidation stage, but the uptrend is still intact.
The 14, 21, 31 EMA is still serving as the dynamic support for Genting and as long as price is still above the dynamic support, the technical outlook shall remain positive. In other words, investors can choose to hold on to their position, until price should break below the 14, 21, 31 EMA, it would be the signal to cut loss, or the take profit.
Meanwhile, as price is consolidating, investors are staying on the sidelines, and as a result, volume has declined significantly. It is normal to have lower volume during consolidation, but if price should break above its resistance, a substantial volume is needed to confirm the break out.
| 4 Q Rolling PER | 21.82 times | Dividend Yield | 0.77 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 7.20 sen | 1.14 % | 11.74 % |
| 31/12/2008 | 7.00 sen | 1.89 % | 6.27 % |
| 31/12/2007 | 37 sen | 0.98 % | 12.15 % |
| 31/12/2006 | 32 sen | 0.97 % | 21.56 % |
| 31/12/2005 | 29 sen | 1.36 % | 22.86 % |
Table 3: Genting – 3182, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
Despite KLCI index components are still lifting the KLCI higher, there are many counters still trending down, and by right, investors is best to avoid stocks that are in downtrend. As for catching the rebound, it is a high risk strategy and only suitable for experienced traders.
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