Revision of Last week's Case Study: Topglov: Breaking below RM5.50 support.
Chart 1: Topglov – 7113 (01/06/2009～22/09/2010)
As shown on chart 1, price of Topglov fell below RM5.50 support level, breaking a 9 months new low. This is a typical downtrend formation as it was forming lower-highs, in which the peak of 14th September was lower than the peak of 25th of August, and now that price is breaking below RM5.50, the downtrend characteristic is load and clear.
Meanwhile, since breaking below the 14, 21, 31 EMA on the 22nd of July, price of Topglov stayed below the 14, 21, 31 EMA, with weak technical outlook. In other words, all invests who bought below the 14, 21, 31 EMA and if they are still holding now, are losing money. Therefore, many of these losers will have a mind set to wanting to break even, thus creating more selling pressure. The 14, 21, 31 EMA shall remain as the dynamic resistance.
As long as the above mentioned criteria are still intact, together with negative memory of investors, the downtrend is expected to continue. Support for Topglov is at RM4.50 while the resistance is at the 14, 21, 31 EMA.
| 4 Q Rolling PER | 6.46 times | Dividend Yield | 3.96% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/08/2009 | 22 sen | 3.17 % | 11.04 % |
| 31/08/2008 | 11 sen | 2.71 % | 8.01 % |
| 31/08/2007 | 9.22 sen | 1.31 % | 8.38 % |
| 31/08/2006 | 9.00 sen | 1.04 % | 7.90 % |
| 31/08/2005 | 8.00 sen | 1.60 % | 9.06 % |
Table 1: Topglov – 7113, yearly dividend, dividend yield, and net profit ratio.
Supermx – 7106: Still in downtrend.
Chart 2: Supermx - 710601/06/2010～22/09/2010)
As shown on chart 2, price of Supermx fell below the 14, 21, 31 EMA on the 9thof August, and until now, it is still trading below the 14, 21, 31 EMA. Despite losing up to RM2.30 or 36% in value, technically, there is no ideal buy signal.
Based on the chart reading, current support for Supermx is at RM3.90, and there is a chance of a technical rebound at this level. However, technically, all rebound below the 14, 21, 31 EMA is only considered as a technical rebound, but not a trend reversal. Any one attempt to catch the rebound has to have a trading plan, just in case price should retreat again and break below the RM3.90 level.
As for an ideal buy signal, price has to break above the 14, 21, 31 EMA, and form a higher-low with strong volume.
| 4 Q Rolling PER | 6.54 times | Dividend Yield | 2.63% |
| 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 2: Supermx – 7106, yearly dividend, dividend yield, and net profit ratio.
Kossan – 7153: Downtrend intact.
Chart 3: Kossan – 7153 (01/06/2010～22/09/2010)
As shown on chart 3, since price of Kossan fell below the 14, 21, 31 EMA on the 2ndof August, it has been trending down below the 14, 21, 31 EMA. As indicated by A, despite a technical rebound, it hit the 14, 21, 31 EMA, and failed to break away from its downtrend, and later even breaking below the RM3.15 support. Therefore, the downtrend is still intact.
Next support for Kossan is at RM2.93~RM3.00 level, and there is a chance that price could rebound from this level, or consolidate there. However, as long as price is still below the 14, 21, 31 EMA, the technical outlook remains weak, and no ideal buying signal.
Although there is no ideal buy signals, a skilled trader would have stayed away from this downtrend, and avoid losing money in this downtrend, which is a big step forward in becoming a professional investor.
| 4 Q Rolling PER | 7.66 times | Dividend Yield | 1.63 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 5.13 sen | 0.75 % | 8.04 % |
| 31/12/2008 | 6 sen | 2.14 % | 6.63 % |
| 31/12/2007 | 5.82 sen | 0.75 % | 8.03 % |
| 31/12/2006 | 0 sen | 0 % | 6.90 % |
| 31/12/2005 | 6 sen | 3.08 % | 7.59 % |
Table 3: Kossan – 7153, yearly dividend, dividend yield, and net profit ratio.
Latexx – 7064: Downtrend intact.
Chart 4: Latexx – 7064 01/06/2010～22/09/2010)
As shown on chart 4, price of Latexx fell below the 14, 21, 31 EMA since 9th of August, and until now, it has fallen RM0.92 or 26% in share price. In addition, there was a rebound on the 9th of September, but price failed to break above the 14, 21, 31 EMA, thus the downtrend remains intact, and later on, price even fell below the RM2.86 support, making a new low, which continued its downtrend.
To some investors, when price is falling, it may appears that the market is giving him or her a big discount. But in reality, as long as price of Latexx is still below the 14, 21, 31 EMA, the selling pressure is higher than buying interest. This is because those who are losing money in this downtrend are most likely to be the ready sellers who wanted to break even, thus creating a strong selling pressure.
| 4 Q Rolling PER | 11.05 times | Dividend Yield | 0.74 % |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/12/2009 | 2 sen | 0.53 % | 15.86 % |
| 31/12/2008 | 0 sen | 0 % | 6.97 % |
| 31/12/2007 | 0 sen | 0 % | 3.40 % |
| 31/12/2006 | 0 sen | 0 % | 2.79 % |
| 31/12/2005 | 0 sen | 0 % | 3.35 % |
Table 4: Latexx – 7064, yearly dividend, dividend yield, and net profit ratio.
Conclusion:
It is important that an investor to understand that market leaders and theme do change. Therefore, other than following the broad market, picking up the right counters from the right theme is also important. As for glove and rubber stocks, even if their price should return to their original level before the 2009 rally, it might not be a good level to pick them up, for the next rally could be a totally different theme.
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