Chart 1: KLCI as at 13/4/2011.
As shown on chart, the KLCI had a sharp correction last week, and during the correction, the KLCI had briefly broken below the 14, 21, 31 EMA, but was supported by the 1525 level and rebounded on Wednesday.
Technically, the couple of falling days could not indicate a reversal, but merely a technical correction. Unless, of course, the KLCI should form a lower-high, then it would be an early warning signal. Nevertheless, market volume has fallen below the 40-day Volume Moving Average. Generally, if volume should remain low, the market or the KLCI is less likely to regain its strength.
Case Studies:
IOIcorp – 1961: Short term weakness.
Chart 2: IOIcorp – 1961 as at 13/04/2011, weekly chart.
When the KLCI corrected, index components are likely to be affected, IOIcorp is no exception. As shown on chart 2, price of IOIcorp is now testing the RM 5.50 support. The RM 5.50 was originally a resistance (from October 2009 to September 2010). when price of IOIcorp broke above the RM 5.50 resistance, it became the support for the year 2011. In end of February 2011, price of IOIcorp retreated sharply, and tested this support, and fortunately, it works, price rebounded, and avoided a downtrend formation.
Now that price of IOIcorp is testing the RM 5.50 again, and if price should really break below this level, the technical outlook for IOIcorp would stay negative. On the weekly chart basis, price of IOIcorp has already broken below the 14, 21, 31 Weekly EMA, and therefore, IOIcorp chart is showing weakness.
In short, if price of IOIcorp could stay above RM 5.40~RM 5.50, then it might have a chance to prolong its sideways consolidation, and hopefully when market turns better one day, then it would have a chance to regain its strength. But for now, RM 5.40~RM 5.50 is an important level to watch out for.
| 4 Q Rolling PER | 16.60 times | Dividend Yield | 3.09% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 30/06/2010 | 17 sen | 3.28% | 16.23% |
| 30/06/2009 | 8 sen | 1.69% | 6.74% |
| 30/06/2008 | 17 sen | 2.28% | 15.22% |
| 30/06/2007 | 7 sen | 1.35% | 16.55% |
| 30/06/2006 | 43.5 sen | 3.04% | 13.81% |
Table 1: IOIcorp – 1961, yearly dividend, dividend yield, and net profit ratio.
Drbhcom – 1619: Uptrend remains intact.
Chart 3: Drbhcom – 1619 as at 13/04/2011.
As shown on chart 3, after breaking above the RM 2.25 resistance, price of Drbhcom pullback last week, and now testing the RM 2.25 support as well as the 14, 21, 31 EMA dynamic support. Fortunately, as indicated by A, price of Drhbcom successfully rebounded from the 14, 21, 31 EMA and RM 2.25, thus the uptrend is still intact.
For those whom are already in position, as long as price of Drhbcom is still supported by the 14, 21, 31 EMA, it is still a good idea to hold. Provided one should gradually lift the cut loss level higher according to the 14, 21, 31 EMA.
Although the uptrend is still intact, to sustain the uptrend, price has to later break above RM 2.50 peak. On the contrary, if price should later form a lower-high, it would be an early signal implying a weakness of Drbhcom's uptrend.
| 4 Q Rolling PER | 21.13 times | Dividend Yield | 2.22% |
| Dividend | Dividend Yield | Net Profit Ratio | |
| 31/01/2010 | 8.50 sen | 2.39% | 7.25% |
| 31/01/2009 | 7.00 sen | 2.97% | 5.23% |
| 31/01/2008 | 5.00 sen | 6.71% | 3.32% |
| 31/01/2007 | 2.00 sen | 1.33% | 3.46% |
| 31/01/2006 | 2.00 sen | 2.78% | -1.00% |
Table 2: Drbhcom – 1619, yearly dividend, dividend yield, and net profit ratio.
Revision of last week's Case Study: MHB – 5186: Uptrend remains intact.
Chart 4: MHB – 5186 as at 13/04/2011.
Like many counters, price of MHB was affected by the sharp correction of the KLCI last week, but price of MHB managed to stay above the 14, 21, 31 EMA, and this suggests that the uptrend of MHB is still intact. Therefore, those whom had already bought, it is a good idea to stay in position, so long price is still above the 14, 21, 31 EMA.
Technically, if price of MHB should break below the 14, 21, 31 EMA, then the short term movement of MHB will be affected, but the longer term movement of MHB shall remain unaffected. If price should later form a lower-high after price of MHB stays below the 14, 21, 31 EMA, it suggests a weakness of price movement, or a possible downtrend formation, thus a signal to suggests a reduce of position.
Since total market volume were reduced, and the market is in a consolidation mood. Therefore, those whom are interested in picking up new position, will need to consider that if market volume should stay low, chances of stock to rally is generally lower.
Conclusion:
Generally, the chances of a stock sustaining its uptrend, has to do with the overall market condition, particularly, the volume. When volume is low, the market usually is in a consolidation mood, or with some weakness. When stock market rally, volume is an important element to push price higher. Of course, volume can not always be high, it is not likely. So long as the rally with volume, will repeat again and again, it would suffice in fueling the general 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。
